SUSTAINABILITY
102 About This Sustainability Statement 104 Stakeholder Engagement 110 Identifying Our Material Matters 114 Our Journey Towards Stronger Sustainability 116 Sustainability Performance 122 Targets and Achievements 123 Strengthening Economic Integrity 126 Managing Our Environmental Impacts 140 Ensuring Safe and Quality Construction 152 Human Capital Development 164 Building Community Resilience
PROTECTING OUR LEGACY OF SUSTAINABILITY
It is our responsibility to hold our sustainable practices to the highest standards possible. The wellness of everyone and everything around us will be the greatest footprint we leave behind. Sunway Construction Annual Report 2018 Sunway Construction Annual Report 2018
ABOUT THIS SUSTAINABILITY STATEMENT
ABOUT THIS REPORT this sustainability statement are specified with indicator MEMBERSHIPS AND ASSOCIATIONS [102-1, 102-5, 102-52, 102-50] numbers in brackets under the corresponding subtopics. The [102-13] definition for each indicator number are disclosed at the end We adopted a robust approach in strengthening our economic, of the statement. The narrative and supporting data in this We are pleased to note that our status as a constituent of the FTSE4Good Index was reaffirmed in 2018 and we were categorised social and environmental sustainability performance as it statement also reflects our activities in relation to meeting under the 82 percentile rank. Our scores within the three pillars of Environment, Social and Governance reflects the effectiveness is important in securing the confidence and meeting the ISO 9001, OHSAS 18001 and ISO 14001 standards where of our policies and procedures to manage our impact on these three aspects of our business. expectations of our key stakeholder groups. This annual applicable. The sustainability reporting requirements of statement demonstrates the best practices, efforts and Bursa Malaysia have also been highlighted in this statement, Some of the associations that we are members of are listed initiatives that Sunway Construction Group Berhad (“SunCon” which are pertinent in demonstrating our commitment to below: or “the Company”) has undertaken or implemented to sustainability and stakeholder inclusivity. promote local economic development, protect the environment ESG RANKING NAME OF THE ASSOCIATION SUNCON MEMBERSHIP and support our surrounding communities from 1 January Master Builders Association SunCon has been a member SCOPE OF REPORTING Environmental Social Governance Malaysia (MBAM) since 1988 2018 to 31 December 2018. [102-2, 102-4, 102-5, 102-6, 102-7] Score Score Score Construction Industry CIDB Grade 7 Contractor The scope of reporting extends to the activities and projects of ollution an a our Ris Development REPORTING FRAMEWORK Resources Stan ar s ana e ent [102-54] Sunway Construction Group Berhad and its active subsidiaries; Board (CIDB) Sunway Construction Sdn. Bhd., Sunway Geotechnics (M) ater se ealt an Corporate Singapore Precast SunCon is affiliated with In this report, we have presented the disclosures in line Sdn. Bhd., Sunway Engineering Sdn. Bhd., Sunway Precast Sa ety o ernance Association this association for our with the Global Reporting Initiative (GRI) Standards – Core Industries Sdn. Bhd. and Sunway Concrete Products (S) Pte. Option. Relevant GRI standards which are disclosed in u an Ri ts operations in Singapore Ltd. Cli ate C an e an Co unity Anti Corruption
io i ersity The projects that have been discussed in SunCon’s Sustainability Statement in 2018 are as listed below: Project Name Description Location Parcel F Government Office Buildings at Putrajaya Putrajaya (Klang Valley) The diagram below illustrates the governance structure and Emerald Residence (ER) Landed Residence Johor Bahru SUSTAINABILITY highlights the main responsibilities of the constituents. As shown Mass Rapid Transit Line 2 Elevated rail from Persiaran Dagang to Klang Valley GOVERNANCE in the structure, the SWC is helmed by the General Manager – Package V201 Sungai Buloh [102-18] of Operations, who is in turn supported by the Sustainability Coordinator. Key personnel and departments are involved in Mass Rapid Transit Line 2 Elevated rail from Sungai Besi to Serdang Raya Klang Valley Governance and accountability are salient in setting the direction the process of identifying risks in the context of sustainability, – Package V205 (North) of the Company towards becoming a leader in sustainability setting targets and developing a robust sustainability strategy. Light Rail Transit Line 3 (LRT3) Elevated rail from Sri Andalas to Kawasan 17 Klang Valley business practices, continually improving key areas relating to We endeavour to successfully incorporate sustainability into – Package GS07-08 sustainability, and demonstrating actions in line with our values. our business strategies and gain competitive advantage as we Sunway GEOLake Residences Serviced Residence at Bandar Sunway Klang Valley explore new business opportunities and enter new markets whilst effectively managing our non-financial risks. International School of Kuala Lumpur Education Facilities Klang Valley (ISKL) ersees t e pro ress o t e Co pany s sustaina ility strate y BOARD OF DIRECTORS Big Box Village Retail Park Johor Bahru i es inal appro al or all policies an easures presente y t e SSC KLCC P1 Basement Carparks Klang Valley KLCC P2 Basement Carparks Klang Valley Sustainability Steering Committee (SSC) inalises t e aterial issues i enti ie y t e S C onitors an i ple ents t e sustaina ility strate y Co prises o SunCon s senior ana e ent Sunway Medical Centre 4 (SMC 4) Medical Centre Klang Valley ersees S C s role in i ple entin sustaina ility initiati es Sunway Velocity Medical Centre Medical Centre Klang Valley HEAD ersees an re iews t e sustaina ility reportin process (SVMC) enti ies t e aspects o sustaina ility t at are ein OF SWC a resse t rou out t e or anisation Sunway Serene Serviced Residence at Kelana Jaya Klang Valley Sustainability Working Committee (SWC) enti ies potential aterial sustaina ility atters an eter ines Gas District Cooling P1 District Cooling Plant Putrajaya (Klang Valley) Co prises o epart ents t at are responsi le or runnin ey aspects o SunCon s operations its i portance to t e usiness an t e sta e ol er Integrated Construction and Highly automated precast factory Singapore enti ies an proposes rele ant sustaina ility policies an strate ies Prefabrication Hub (ICPH) that uses state-of-the-art technology Bukit Bintang City Centre Piling Works Klang Valley enti ies t e rele ant epart ents an Human Total Quality Finance SUSTAINABILITY Resources Management coor inates ata collection ro respecti e COORDINATOR epart ents or sustaina ility reportin Environmental, Contracts and Operations Safety and Procurement and Projects Health
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STAKEHOLDER ENGAGEMENT [102-40, 102-43, 102-44]
Our stakeholders have a vested interest in SunCon’s engagement covers different practices that need to be Stakeholder Expectations Engagement Frequency of Addressing Their Expectations strategies and development plans, and their involvement employed and integrated in order to build strong and Group Method Engagement is key in achieving our sustainability goals and targets. At meaningful stakeholder relations. the heart of our success is our value creation process, which Authorities • Compliance Inspections As per the • Mandatory plant and machinery draws on various inputs and through our business activities, The concerns and expectations of stakeholder groups are and with guidelines operational inspections to ensure all machineries converts them to outputs that create positive value for our constantly evolving and monitoring them is an ongoing Regulators and regulations requirements are in good working conditions stakeholders. process. The table from pages 104 to 109 captures the key Engagement sessions On going • Drug test and health talks were stakeholder groups involved, their expectations, methods of conducted at Parcel F by Agensi Anti Stakeholder engagement defines the broader, more inclusive engagement and the manner by which we have addressed Training, seminar and On going Dadah Kebangsaan (AADK). Machinery and continuous process between us and our stakeholders, their expectations in 2018. demonstrations operators were tested for drugs and encompassing a range of activities and approaches that results were negative spans the entire life of a project. The spectrum of stakeholder Report submissions Monthly • The MOH conducted inspections at our project sites to ensure all larvae Site visits and audits Spot checks / breeding grounds are eradicated On going • All SunCon project sites participated in Audits by regulators Monthly Communication Information Negotiation the Communcation for Behaviour Consultation Participation and Impact (COMBI) programme, an Strategies Disclosures Partnerships Engagement with Monthly/ initiative by MOH to combat dengue at Department of Annually construction sites Occupational Safety and Health (DOSH), • Site visits and audits by DOSH, DOE and Department of CIDB to ensure our business operations Environment (DOE), are in compliance with regulatory The stakeholders that have been covered in discussing SunCon’s performance in 2018 are as listed below: Ministry of Health requirements Stakeholder Expectations Engagement Frequency of Addressing Their Expectations (MOH) and BOMBA • Spot-checks by Immigration Department Group Method Engagement at project sites Spot checks by Ad-hoc • BOMBA and Jabatan Pertahanan Awam Clients • Proper project Client Satisfaction Annually • Client and consultant satisfaction Malaysian Malaysia (JPAM) were involved in management Survey index in 2018: 93.3% Immigration emergency rescue drills at our project • Project Quality Assessment Annually • Average QLASSIC score for projects Department sites completed in assessed in 2018: 73.6% compliance System in • Progress reports submitted to DOSH and • 2 QLASSIC awards received (for Green Card As and when with standards, Construction DOE on a monthly basis (QLASSIC) projects assessed in 2017) Certification necessary high quality training with • Compulsory training and seminars • ESH Townhall at project LRT3 served and on time Construction organised by DOE and DOSH as part of Progress meetings Monthly/ as a communication platform to delivery Industry the Continuous Education Programme and updates weekly address issues relating to public safety • Safety and Development (CEP) for registered competent person security of • ESH campaign is conducted annually Progress reports Monthly Board (CIDB) • Engagement session with DOSH for sites at our projects as an engagement Work Package Contractors of MRT2 • Compliance Site walk with top Monthly platform with clients and the workers and LRT3 project with management • Launched Occupational Safety and environmental, Health in Construction Industry safety and Townhall Annually (Management) 2017 health laws and regulations ESH Campaign Annually • Annual fire drills held by BOMBA • New workers and employees were sent for compulsory CIDB Green Card certification training
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STAKEHOLDER ENGAGEMENT (cont’d) [102-40, 102-43, 102-44]
Stakeholder Expectations Engagement Frequency of Addressing Their Expectations Stakeholder Expectations Engagement Frequency of Addressing Their Expectations Group Method Engagement Group Method Engagement Shareholders, • Effective Statutory As and when • Analyst house that covers SunCon: Suppliers and • Safe working Subcontractors Annually • Grading of subcontractors in 2018 Investors communication announcements necessary - 2018: 14 out of which 4 has buy call Subcontractors environment assessment - Grade A: 1%, Grade B: 33%, and Analysts and business • Professional Annual General Quarterly or - 2017: 15 out of which 12 has buy call Suppliers assessment Annually Grade C: 60%, Grade D: 5%, Grade E: 1% strategies and transparent • Supplier grading in 2018 - Grade A: 3%, • Timely and Meetings when any - 2016: 13 out of which 10 has buy call procurement changes occur ESH committee Monthly Grade B: 80%, Grade C: 17% transparent • 4 quarterly financial reports process • Established an E-bidding system to ensure reporting in the Group • Timely • 148 Bursa announcements Regular engagement Daily/Weekly transparency and paperless transactions • Strong corporate Corporate events Annually payment with suppliers and • 25 one-on-one management meetings • Daily toolbox meetings held at project site governance subcontractors to • 6 small group meetings before daily work commences • Prudent risk Small group As and when understand their management meetings upon request • Attended 10 conferences held in needs • Utilise the Esker software for payment • Market and by bankers Singapore, Japan, Thailand and Malaysia processes since 2016 for timely payments business and analysts • 4 th AGM held on 20 June 2018 at • ESH Townhall on 31 July 2018 at LRT3 performance necessary Sunway Resort Hotel and Spa served as a communication platform with outlook and our staff and subcontractors to pledge on strategies Conferences Ad-hoc • SunCon supported the Bursa Bull Charge 2018 held on 27 September 2018 continual commitment to environmental One-on-one Ad-hoc protection and safety and health management meetings Trade • Sharing of best Dialogues Ad-hoc • Participated in one of the 14 dialogue Union and practice and sessions organised by Ministry of Human Employees • Career Employee Biennially • Engaged with employee groups EG3 Professional knowledge to Meetings Ad-hoc Resources on Foreign Workers development engagement and above to identify their needs Bodies improve the Management Matters Trainings As and when and progression surveys and concerns industry as a needs arise • 3 Dialogue sessions with National Institute • Knowledge whole of Occupational Safety and Health (NIOSH) Dialogue and 7 sessions • Activities conducted by SunCon Social and skills Club in 2018 • Implementation Project site visits Spot-check to establish Authorised Entrant and enhancement engagement of policies and • Mandatory training and certification Standby Person (AESP) for Confined Space • Fair requirements by Technical Committee Ad-hoc Health screening 3 sessions for CIDB Green Card (working at height, customised training for all Work Package remuneration relevant agencies programme safety awareness, heavy lifting and Contractors at MRT 2 project • Work-life or professional scaffolding) • SunCon has 5 representations in Masters balance bodies Builders Association of Malaysia (MBAM) • Safe, healthy ESH committee Annually • ESH Townhall on 31 July 2018 at and conducive project LRT3 served as a communication • SunCon has 30 registered Safety and workplace Townhall Annually platform with our staff and Health Officer (SHO) subcontractors to pledge on continual • SunCon has 3 Certified Professionals SunCon Social Club 20 commitment in environmental, safety in Scheduled Waste Management programmes and health (CePSWaM), 1 Certified Erosion, Sediment Festive celebrations Annually • Buka Puasa celebration with workforce and Storm Water Inspector (CESSWI), at Centralised Labour Quarters (CLQ) and 4 Malaysian Certified Inspector of Training programmes As per the • Health screening initiative for staff Sediment and Erosion Control (MY-CISEC) training plan and workers at our project sites. • SunCon has membership with NIOSH and Blood pressure and glucose tests were Malaysian Society for Occupational Safety conducted. Participants with borderline and Health (MSOSH) and above borderline results are • 5 SunCon projects were awarded in the required to go for further check-up. MSOSH Occupational Safety and Health Screening was conducted at project (OSH) Award 2017 LRT3, Sunway GEOLake Residences and • Major (R) Leong Yee Keong, Senior General TNB HQ Manager – ESH represented SunCon in the Technical Committee for the drafting of CIDB Construction Industry Standard, CIS 10:2008 on Occupational Safety and Health Assessment System in Construction Industry
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STAKEHOLDER ENGAGEMENT (cont’d) [102-40, 102-43, 102-44]
Stakeholder Expectations Engagement Frequency of Addressing Their Expectations Stakeholder Expectations Engagement Frequency of Addressing Their Expectations Group Method Engagement Group Method Engagement General • Responsible Complaint hotline Throughout • Hotline numbers are displayed at Business • Adherence Satisfaction survey Annually • JV with Taisei Corporation to build a new Public corporate number the project project site entrance and on hoarding Partners to corporate warehouse for Nippon Express Malaysia JV-client meetings Monthly for governance construction surrounding the project governance • JV with HL Building Materials Pte. Ltd. Complaint ongoing • Project phase • Calls regarding the projects are returned and national for the development of ICPH transparency management system regulations projects within 15 minutes and concerns • To schedule committee meeting with and progress for MRT and LRT • Transparent Joint identified JV partner at quarterly basis or as and updates projects Venture (JV) • Mail drops done in the event of critical when required • Timely relationship Mail drops to provide building activities (noisy machinery, feedbacks • Open knowledge project updates and closed roads etc.) resolution information sharing between • Safe construction • Radio announcements to disclose industries practices Media communication project information and updates • Meeting targets via radio • Townhall held one month before project and expectations announcements commences to notify residents about project Civil Society • Fair treatment Implementing the On going • Number of unemployed graduates Resident townhalls • Information box updates every 3 months Organisations of employees Skim Latihan 1 undergoing training under Skim Latihan (CSO) and workers Malaysia (SL1M) 1Malaysia (SL1M) for 2018: (85 trainees Information box at to update on project progress and any changes • Safe working hired) public areas around conditions at project site • Signing Ceremony of Memorandum project site Collaboration Annually of Understanding (MoU) between Media • Immediate Press release Quarterly / • Two exclusive interviews were conducted • Employment with Malaysian Malaysia Productivity Corporation (MPC) notification of annually and by local printing house in 2018 opportunities to Productivity and SunCon to mark the collaboration financial releases As and when local community Corporation in establishing 5S standards for and material necessary construction industry developments • Timely and Media coverage As and when transparent necessary communication
Community • Responsible Sponsorship and Annually • Sekolah Sultan Alam Shah, Putrajaya corporate citizen donations - Contributed in the upgrading works which gives back Community service Ad-hoc of basketball court for Sekolah Sultan to the community Alam Shah, Putrajaya • Responsible for Community building Project-to- - Conducted fogging, larvaciding and the livelihood of project basis gotong-royong at Sekolah Sultan Alam the surrounding Shah, Putrajaya to eradicate potential community mosquitoes breeding grounds throughout the construction - Assisted in cutting and trimming of phase trees at Sekolah Sultan Alam Shah, • Public safety Putrajaya - Cleaning of Sultan Alam Shah school compound to eliminate dengue cases • Conducted fogging for Jalan Jati SD4 communities • Defogging of Jalan Dagang to eliminate dengue mosquitoes and breeding sites • Gotong-royong at Flat Cempaka Mawar, Klang to prevent the spread of dengue • Number of fundraising activities in 2018: - Charity Car Wash – Build a Home - Minggu Infaq Putrajaya 2018 New Warehouse in Shah Alam for Nippon Express Malaysia
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IDENTIFYING OUR MATERIAL MATTERS
MATERIALITY ASSESSMENT MAPPING MATERIAL SUSTAINABILITY MATTERS & SUSTAINABLE DEVELOPMENT GOALS [102-46, 102-47] The table below maps the material sustainability matters to its relevant position on the matrix, to the stakeholder group(s) SunCon’s materiality assessment involved three steps. However, before embarking on the assessment, we reviewed the 29 to whom the material matter concerns, to the relevant GRI Standard and to the corresponding Sustainable Development Goals material sustainability matters that were selected in 2017, to categorise them by their realm of impact/influence, i.e. economic, (SDGs). environmental or social and aligned the titles of some matters to GRI terminology. Economic Environmental Social
NO MATERIAL RELEVANT GRI STANDARD SUSTAINABLE STEP STEP STEP SUSTAINABILITY STAKEHOLDER INDICATOR DEVELOPMENT GOALS 1 2 MATTER GROUP(S) Ran in eac aterial Ran in eac aterial sin t e ran in s t at 1 Public Safety Employees, authorities and Occupational Health atters ase on atters ase on were assi ne in S 1 regulators, suppliers and and Safety w et er it is o e iu w et er it is o e iu an S 2 y t e subcontractors, general public i or si ni icant i or si ni icant Sustaina ility or in i portance to t e i portance to t e Co ittee we eri e t e 2 Occupational Employees, authorities and Occupational Health i erent sta e ol er usiness operations ateriality atri w ic Health regulators, suppliers and and Safety roups esta lis es SunCon s and Safety subcontractors priority areas or sustaina ility 3 Economic Shareholders, investors and Economic Performance analysts, business partners Performance
4 Quality Trade union and professional Customer Health Management bodies, suppliers and and Safety Materiality Matrix subcontractors
Si ni icant 5 Anti-Corruption Employees, authorities and Anti-Corruption regulators, suppliers and subcontractors, general public 1 2 6 Customer Community, general public, Universal Satisfaction CSOs Disclosure 22 2 1 2 18 2 7 Employee Employees, CSOs Employment i 2 2 20 1 Engagement 12 2 1 10 1 1 8 21 11 1 8 Talent Retention Employees Employment
28 9 Stakeholder All stakeholder groups Universal e iu Engagement Disclosure e iu i Si ni icant Influence on Stakeholder Assesments and Decisions Significance of Group’s Economic, Environmental and Social Impacts 10 Career Employees Employment Development
Table Legend 11 Employer-Employee Employees Training and cono ic n icators n iron ental n icators Social n icators Relations Education
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IDENTIFYING OUR MATERIAL MATTERS (cont’d)
MAPPING MATERIAL SUSTAINABILITY MATTERS & SUSTAINABLE DEVELOPMENT GOALS (cont’d) NO MATERIAL RELEVANT GRI STANDARD SUSTAINABLE SUSTAINABILITY STAKEHOLDER INDICATOR DEVELOPMENT GOALS NO MATERIAL RELEVANT GRI STANDARD SUSTAINABLE MATTER GROUP(S) SUSTAINABILITY STAKEHOLDER INDICATOR DEVELOPMENT GOALS Child and Authorities and Forced or Compulsory MATTER GROUP(S) 26 Compulsory regulators, CSOs Labour, Child Labour 12 Local Hiring Employees, community, Market Presence Labour general public Fair Tender Authorities and regulators, Anti-Corruption 27 Bidding suppliers and subcontractors 13 Non-Discrimination Employees, suppliers and Non-Discrimination subcontractors 28 Corporate Social Community, shareholders, Local Communities Responsibility investors and analysts, Supply Chain Suppliers and subcontractors Supplier Social 14 media Management Assessment, Procurement Practices 29 Diversity and Employees Diversity and Equal Inclusiveness Opportunity 15 Employee Employees Training and Training Education
Nation Building CSOs, community, general public, Market Presence, 16 shareholders, investors and Employment, analysts, media Economic Performance DEFINING OUR COMMITMENT TO SUSTAINABILITY Procurement Suppliers and Procurement Being part of Sunway Group, we uphold the Group’s corporate vision “to be Asia’s model corporation in sustainable development, 17 Practices subcontractors, authorities Practices innovating to enrich lives for a better tomorrow” which defines our aspirations for success and our organisational culture to and regulators implement best practices throughout our operations.
18 Materials Suppliers and subcontractors, Materials authorities and regulators REPORTING PILLARS 19 Community Community, general public, Local Communities Engagement media Stren t enin cono ic o continuously a e a positi e i pact on t e local econo y nte rity an to e pan our usiness in a sustaina le anner 20 Energy CSOs, community, general public, Energy $ shareholders, investors ana in ur and analysts o iti ate any ne ati e en iron ental i pact y o ser in est n iron ental in ustry practices an strict a erence to en iron ental re ulations 21 Customer Clients, general public Customer Privacy pacts Privacy nsurin Sa e an uality o create a sa e an ealt y wor in en iron ent or all e ployees an prioritise uality construction 22 Waste Community, general public, Effluents Construction Management authorities and regulators and Waste
u an Capital o create a con uci e wor place w ere our 23 Water Community, general public, Water e elop ent e ployees can row pro essionally an personally authorities and regulators
uil in o support t e ulnera le sections o t e co unity an en a in Community Community, general public, Economic Co unity 24 t e pu lic to at er ee ac to un erstan t eir concerns Investment media Performance Resilience
25 GHG Emissions Authorities and regulators, Emissions and Climate Change shareholders, investors and analysts
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OUR JOURNEY TOWARDS STRONGER SUSTAINABILITY
Our legacy is built on sustainable practices and it is our duty to ensure that we stand firm in our beliefs for the betterment of Strategic Description 2018 Targets Related Material our surroundings. Thrusts Sustainability Matter Our projects assist societies in overcoming challenges of growing populations, connectivity, resiliency, and resource management. Workplace We continuously seek • To gather employee feedback • Employee Engagement We recognise our role in facilitating both social and economic development in the countries where we operate. In order to Environment to create a conducive biennially and monitor employee • Employer-Employee Relations entrench sustainability into the fabric of the organisation, we have integrated the key themes of our sustainability approach working environment for all satisfaction levels • Diversity and Inclusiveness into the main thrusts of SunCon’s business strategy. We monitor our progress on these themes as we believe it represents the employees and workers • To have regular management- • Non-Discrimination impact of our operations on our key stakeholder groups. employee engagement sessions • Child and Compulsory Labour • To practice ethical and fair • Stakeholder Engagement practices and implement policies Strategic Description 2018 Targets Related Material that protect the employees from Thrusts Sustainability Matter any wrongdoing Business To maintain our status as one • Top 3 construction and • Economic Performance Community We take active efforts to • To take active efforts towards • Public Safety Performance of the top three construction engineering company in • Nation Building support and safeguard the ensuring public safety and • Community Investment players in Malaysia and to be Malaysia • Anti-Corruption surrounding communities reducing any negative impact • Community Engagement the largest listed pure play • Yearly order book replenishment • Fair Tender Bidding where we operate our project sites have on the • Corporate Social Responsibility construction group RM2 billion • Stakeholder Engagement surrounding community • Stakeholder Engagement • Return on Capital Employed • To support and provide aid to above 30 per cent uplift the vulnerable sections of the community
Health, Safety We are determined to instil • To maintain zero life loss at all • Occupational Health and Safety Quality and We are committed to • Maintaining the quality standards • Quality Management and Security safety as a way of life project sites • Customer Privacy Innovation delivering high quality in achieving QLASSIC scores above • Customer Satisfaction throughout our organisation • To ensure all project worksites • Stakeholder Engagement products across all trades industry average of 74% under • Stakeholder Engagement and at all times strictly comply with applicable and constantly innovate the construction sector legal requirements in relation to to find more efficient • Mechanisation of precast plant health and safety construction methodology in Senai and Iskandar to increase production capacity Environment To manage and utilise • To ensure all project worksites • Energy Global We are cognisant • To secure at least one project • Local Hiring resources, as well as carry out strictly comply with applicable • Water Expansion of the need to expand internationally in 2018 • Supply Chain Management operations in a manner that legal requirements in relation • Waste Management geographically in order particularly in Myanmar or • Procurement Practices protects the environment to reducing our environmental • GHG Emissions and Climate to sustain and grow Indonesia • Stakeholder Engagement impact Change our operations • To look for new opportunities in • Materials India, where we have had success • Stakeholder Engagement in completing projects • To be on the outlook for Human Capital We continuously develop • Maintaining productivity of • Employee Training international opportunities within Development competencies, capabilities employees to a target of 15 times • Talent Retention the ASEAN context and talent of our people revenue per employee • Career Development which is the most important • Securing an engagement score of • Stakeholder Engagement asset to us 65 per cent and above * For more information please refer to Business Objectives and Strategies
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SUSTAINABILITY PERFORMANCE [102-7, 102-8, 102-51, 202-2, 401-1, 403-2, 404-1, 405-1, 405-2]
2018 2017 2016 2018 2017 2016 ENVIRONMENT Gender1 Total Water Use (m3) 387,932 332,279 274,318 Overall Electricity Consumption (kWh) 1,058,342 1,037,382 1,594,974 Female 14% 16% 15% Diesel Consumption (litres) 5,818,880 5,292,948 5,386,869 Male 86% 84% 85% Gender (Executive Level Employees EG1-9) CO2 Emissions from Company-Owned Vehicles and Machinery (CO2e) 15,704 14,285* 14,538* Female 31% 29% 29% CO2 Emissions from Purchased Electricity (CO2e) 784 769* 1,182 Male 69% 71% 71% CO2 Emissions from Air Travel (CO2e) 84 45* 77* Gender (Non-Executive Level Employees) Construction Waste Disposal (MT) Female 5% 7% 6% Concrete 12,366 36,821 7,984 Male 95% 93% 94% Steel 1,401 2,510 2,477 Timber 3,245 1,473 517 Age Group Overall
Materials Purchased (MT) < 30 40% 37% 37% Steel Bar 37,311 49,518 37,683 30 - 50 51% 52% 51% Cement 6,317 12,547 37,153 >50 9% 11% 12% Sand 55,648 102,977 165,561 Age Group (Executive Level Employees EG1-9) Ready Mixed Concrete 52,005 51,092 29,775 < 30 29% 34% 32% Quarry 150,001 285,554 4,783 30 - 50 55% 50% 52% Premix 2,674 153 51,812 >50 16% 16% 16% Age Group (Non-Executive Level Employees) < 30 46% 39% 41% 30 - 50 48% 53% 52% WORKPLACE >50 6% 8% 7% Employees Total Number of Employees 2,448 2,097 2,025 Years In Service Executives 35% 42% 40% Less than 1 year 28% 15% 23% Non-Executives 24% 35% 33% 1 - 3 years 25% 28% 24% Foreign Skilled Labour 41% 23% 27% 3 – 6 years 20% 37% 39% Permanent Staff 48% 64% 63% 6 – 10 years 18% 12% 7% Non-Permanent Staff 52% 36% 37% 10 – 15 years 5% 5% 4% Number of Physically Challenged Employees 2 2 2 15 years and above 4% 3% 3% Total Number of JPA Graduates Under the Scholarship Talent Attraction 5 6 4 and Retention (STAR) Programme by Talentcorp 1 Note: Construction is still a male-dominated industry even in developed countries due to long working hours for night casting and a demanding work schedule. Percentage of Women in Management 27% 23% 23%
* Restated
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SUSTAINABILITY PERFORMANCE (cont’d)
2018 2017 2016 2018 2017 2016 WORKPLACE (cont’d) SENIOR MANAGEMENT (EG10 & ABOVE) Diversity By Gender Overall Female 8% 8% 8% Malay 50% 51% 49% Male 92% 92% 92% Chinese 33% 34% 36% Indian 14% 12% 12% By Age Others 3% 3% 3% < 30 0% 0% 0% Diversity (Executive Level Employees EG1-9) 30 - 50 31% 29% 32% Malay 39% 36% 33% >50 69% 71% 68% Chinese 49% 52% 56% Indian 10% 10% 10% By Ethnicity Others 2% 2% 1% Malay 4% 5% 4% Diversity (Non-Executive Level Employees) Chinese 83% 86% 83% Malay 66% 68% 67% Indian 13% 9% 13% Chinese 13% 12% 13% Others 0% 0% 0% Indian 18% 15% 15% Others 3% 5% 5% EMPLOYEE TURNOVER RATES Industry Average 9%3 15% 11% BOARD OF DIRECTORS Attrition Rates 13% 13% 13% By Gender Female 14% 14% 12% By Gender Male 86% 86% 88% Female 3% 2% 2% Male 10% 11% 11% By Age 30 – 50 14% 14% 26% By Age Group > 502 86% 86% 74% < 30 7% 6% 5% 30 - 50 5% 6% 7% By Ethnicity > 50 1% 1% 1% Malay 14% 14% 13% Chinese 72% 72% 75% By Region Indian 14% 14% 0% In Malaysia 13% 13% 12% Others 0% 0% 12% Outside Malaysia 0% 0% 1%
2 The majority of directors are aged >50 years as a highly experienced Board is desired which comes naturally with age. 3 Voluntary Attrition Rate for Property & Construction Industry from Korn Ferry Hay Group Property & Construction Forum 2018.
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SUSTAINABILITY PERFORMANCE (cont’d)
2018 2017 2016 2018 2017 2016 4 TOTAL NEW HIRES COMPARISON OF PAY By Gender Total Men Basic Salary (RM) 73,981,915 75,379,611 67,054,157 Female 50 62 47 Average Annual Men Basic Salary (RM) 59,471 60,264 57,702 Male 652 270 454 Average Number of Men Paid 1,244 1,251 1,162 Total Women Basic Salary (RM) 20,325,544 20,193,860 17,296,738 Average Annual Women Basic Salary (RM) 61,780 62,423 58,765 By Age Group Average Number of Women Paid 329 324 294 <30 458 214 286 Ratio of Men to Women Pay Equity 0.96:1 0.97:1 0.98:1 30 – 50 236 103 203 > 50 8 15 12 TRAINING Employee Participation in Training 820 963 1,253 By Region Average Attendance Per Training Programme 20 20 15 In Malaysia 692 330 499 Average Training Budget Per Employee (RM) 859 805 800 Outside Malaysia 10 2 2 Average Man Days of Training Per Employee 2.83 1.23 2.70 Percentage of Employees with a Minimum of 3 Man Days of Training5 12% 13% 32%
By Nationality Malaysia 25.8% 91.1% 52.5% OCCUPATIONAL HEALTH AND SAFETY Indonesia 70.7% 0.5% 47.1% Worked Man-Hours 20,242,286 18,790,437 16,918,924 Bangladesh 0.7% 6.1% 0% Fatal Accidents 0 0 2 China 0.5% 0.8% 0.4% Lost Time Injury Accidents 2 4 6 India 0.3% 0.3% 0% Total Recordable Cases 2 4 8 Philippines 0.3% 0.3% 0% Accident Frequency Rate 0.10 0.21 0.47 Singapore 0.1% 0.3% 0% 5 An Employee Development Target Set by Management Burkina Faso 0% 0.3% 0% Others 1.6% 0.3% 0%
4 By Number of Employees
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TARGETS AND ACHIEVEMENTS STRENGTHENING ECONOMIC INTEGRITY [205-3, 307-1]
Targets Achievements To continuously have a positive impact on the local economy and to expand our business in a sustainable manner. ECONOMIC Economic Performance are presented in Economic Performance are presented in Management Discussion and Analysis in detail. Management Discussion and Analysis in detail. • Nation-building provider for • Realising sustainability practice superior workforce with fair in our core business conduct ENVIRONMENTAL To achieve ZERO compounds and fines from Fine due to mosquito larvae observed at site. compensation and decent and integrating sustainability federal and local authorities. Fine was paid in August and October 2018. opportunities. information into our yearly • Rising economic productivity reporting. To maintain notice received from federal and Notice received on vector issues recorded at through innovation and • Demonstrating our green local authorities on vector issues at 0.25 or 0.043. technological advancement commitment through practices below, company-wide. in business management and and approaches with employees, enterprise resource planning. contractors and the public. Segregate construction waste at designated All project sites segregate construction waste. • Advocating for circular economy areas by type of waste for 3R and disposal. and global resource efficiency through utilising sustainable To achieve a monthly environmental inspection Average score of 84.5% achieved. resources. score of 80% and above. SAFETY ZERO life loss Zero life loss • Leading developer of quality, • Promoting and enforcing non- AND HEALTH sustainable and resilient discriminatory laws and policies infrastructures. for sustainable development. To achieve a monthly inspection score of 80% Average score of 82.0% achieved. • Transforming traditional • Zero incidents of corruption, and above. management method to bribery and fraudulent practice in Accident Frequency Rate (AFR) of less than 0.3. Accident Frequency Rate (AFR) of 0.10. technologically-engaged all forms. system through Virtual Design • Substantially increasing Achieve 3 milestones: 3.9 million, 7 million and Achieved 3rd milestone as the highest and Construction. transparency and inclusivity 10 million company wide-man-hours without accumulated manhours without a lost time • Adopting clean and practices within the organisation. any lost time accident. accident in 2018 was 15,410,095. environmentally sound QUALITY Contractors, subcontractors and suppliers’ Subcontractors rated at Grade C and above technologies in our constructions adherence to SunCon’s quality standards maintained at 94% in 2018 which are GBI certified. To meet the following targets for the annual client/consultant satisfaction survey: • A minimum average score of 70% Achieved an average score of 77.6% HIGHLIGHTS • A minimum average score of 90% in the Recorded a satisfaction rate of 93.3% “satisfaction of products and services” • FTSE4Good Index Series constituent for the 4th • Utilisation of SAP cloud system in supply chain category consecutive year management and procurement strategies • Target response rate 75% Achieved a response rate of 99.4% • Target QLASSIC score of 80% Achieved an average QLASSIC score of 73.6% • FY2018 Accolades include Commendation Award • First in Malaysia to integrate Virtual Design and in Knowledge Management from ACCA Malaysia, Construction (VDC) in the construction line since 2010 OTHERS Number of employees dismissed due to ZERO cases non-compliance with anti-corruption policy 5-Star SCORE Rating, High QLASSIC Achievement, Gold and Silver Class for MSOSH Awards and Asia’s Best • Land acquisition for the development of the Integrated Total number of fines in relation to corruption ZERO cases Sustainability Report within Annual Report 2018 Construction and Fabrication Hub (ICPH) – awarded by Total amount of political contributions ZERO contributions Construction Authority of Singapore on 27 July 2018 • 14% talent growth since 2017 Anti-corruption training for employees All employees are briefed on ethics, corruption and bribery through the Employee Handbook upon joining the Company
Number of projects achieving Green Building 10 GBI-certified projects completed Index (GBI) or other industry-relevant green building ratings. ECONOMIC PERFORMANCE [201-1, 201-4, 203-1]
Economic Performance are presented in Management Discussion and Analysis in detail.
122 123 Sunway Construction Annual Report 2018 Sunway Construction Annual Report 2018
STRENGTHENING ECONOMIC INTEGRITY (cont’d) SUSTAINABLE PROCUREMENT PRACTICES SPENDING ON LOCAL SUPPLIERS [204-1] Our procurement capability continues to gain strength and assessments of suppliers and subcontractors. While traction. We emphasise on the integration of subcontractor subcontractors are assessed based on their capability and Overall, we provide an allocated budget of 70% for spending on local suppliers for all our projects, subject to material cost and and supplier skills and competencies in order to achieve experience in project safety and quality, prospective suppliers availability. Depending on the scale of the project, we assign specific clauses that stipulates the requirement for locally sourced performance improvement and thereby reducing the cost as have to satisfy the five criteria of the e-Supplier Assessment building materials and supplies throughout the project construction phase. Examples of projects with contract agreement well as rewarding the business supply chain with sustainable which are product quality, cost, delivery, safety and health, clauses related to local suppliers are listed in the table below. growth. To build an effective relationship between us and and service quality as illustrated in the following chart. our subcontractors and suppliers, we clearly define our Furthermore, we stress upon the importance of complying with Project Name Two Bid System expectations on matters relating to safety and quality via our the country’s relevant environmental and social regulations 1. KLCC Contractors are required to maximise the usage of local materials/products contract agreements with our suppliers. throughout our supply chain and impart this responsibility to our suppliers and subcontractors. 2. Parcel F Mandatory to utilise local materials and goods SunCon’s Supply Chain and Contracts Management (SCCM) team conducts effective and thorough screening and 3. GDC P1 Mandatory to utilise local materials and goods
4. MRT V201 The contractors are given a specific list of local suppliers to obtain building products
SUPPLIER ASSESSMENT
PRODUCT COST DELIVERY SERVICE SAFETY AND ANTI – CORRUPTION QUALITY QUALITY HEALTH [102-16]
• Performance • Pricing • Delivery • Problem-Solving • Personal SunCon’s stance on anti-corruption and organisational Protective transparency for employees within the organisation is • Written • Fixed price • Delivery Quantity • Value-added Equipment (PPE) conveyed through SunCon’s code of conduct which is complaints with provisional elucidated in the letter of employment given to every new • Interval Time of Service • Safety employee. • Response Time quantity Delivery • Personnel Precautions NO GIFT POLICY • Terms of • Wastage • Urgent Requests Employees are also required to complete an online training on payment • Additional Sunway E-policy, Sunway Code of Conduct and Business, which • Written Protection Complaints necessitate our employees to act with integrity and ethics, to comply with laws and regulations and to uphold cooperative with SunCon’s ‘NO-GIFT’ policy while also acknowledging the behaviours. Sunway Code of Conduct and Business is publicly giver’s kind gesture. Contrariwise, our employees are also not available on our website. advised to give gifts.
One of our existing practices that we have to abide by is We have been conducting and aspire to continue our business the ‘NO-GIFT’ policy. In practising the ‘NO-GIFT’ policy, our operations without any incidents of corruption and these E-BIDDING & E-INVOICING employees have to politely refrain from receiving any gifts. above-mentioned efforts play an important role in ensuring Instead, they are advised to respond to the giver by explaining this.
2018 Reducing paper storage, 63,218 retrieval and wastage invoices issued 156 e-bid events completed
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MANAGING OUR ENVIRONMENTAL IMPACTS
To mitigate any negative environmental impact by observing best industry practices and strict adherence to environmental SUNCON GOOD SOCIAL AND ENVIRONMENTAL PRACTICES regulations.
ployee co pensation is in co pliance wit or en s Co pensation A en ent Act Compensation Packages 1 Social Security nsurance ployer s ia ility nsurance • Maintain clean water and avoid • Advocate efforts to combat pollution via water quality climate change through efficient monitoring. fuel use and monitoring of carbon Quarters and ployees are pro i e acco o ation at a Centralise a our uarter C wit • Reduce dependency on main emissions. Transportation Provision transportation to an ro pro ect sites water supply through • Apply stringent monitoring alternative measures. measures to emissions that Prohibition of or s are sternly re ulate to ensure oo en iron ental practice is con ucte an any • Reuse water from vehicle contribute to accelerating Environmental Degradation potential i pact or pollution is iti ate e ecti ely washing facilities at project sites. climate change which includes • Monitor water consumption NOx and SOx. Penalty for Environmental e n iron ental Sa ety an ealt co ittees are to onitor or any act o pollution co itte activities at the HQ. Pollution or iolation o le al re uire ents Actions will e ta en a ainst t e o en er accor in ly
nsurin Sa e or et o State ent is prepare an sa e wor syste is pro i e as per le al • Encourage use of sustainable • Promote and enforce compliance Occupational Safety re uire ents an in ustry s est practice rainin an ersonal rotecti e uip ent are building materials such as to regulatory requirements and Health precast RC, RMC, GGBS and PFA. through stringent environmental pro i e to all e ployees an wor ers • Ability to provide solutions and monitoring practices. deliver design and build services • Certified for ISO 14001 for Operational Emissions Release o e issions io i ersity i pacts waste isposal pollution an ot er en iron ental meeting the requirements for Environmental Management and Discharges issues resultin ro site operations are easure to strate ise ways or iti ation Green Building certification. Systems. • Minimise the use of timber • Zero incidence of significant All SunCon sta e ol ers to e ac nowle e o SunCon s co it ents or e icient girders and introduce modular spills. Environmental utilisation o resources recyclin initiati e an use o alternate aterials w ic are ore formwork to reduce construction Commitment en iron ental rien ly an reen time and cost. ell t ou t out approac wit local aut orities an co unities y i ple entation o appro e • Ensure the proper management Public Safety ra ic ana e ent lan an SunCon otline is esta lis e as part o rie ance ec anis or and disposal of construction pu lic e ers SunCon strictly a eres to all le al re uire ents wit re ar s to pu lic sa ety waste. protection an i ple entation o in ustry s est practices • Encourage the use of eco- friendly construction materials and the practice of recycling/ reusing them. • Actively monitor the generation of waste at the project sites.
HIGHLIGHTS
• 100% Environmental monitoring at all project sites • Achieved average monthly environmental inspection score at SunCon’s project sites: 84.47% • Sunway Southern Region Office GBI certified • All SunCon’s project sites are ISO 14001 certified • Percentage of SunCon’s machines that are less than 5 years of use: 52%
Daily Housekeeping, Maintenance of Silt Fence near Waterways and Noise Monitoring Activities
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MANAGING OUR ENVIRONMENTAL IMPACTS (cont’d)
Here at SunCon, we practice due diligence in managing our and invest in taking several proactive initiatives to conserve AIR MONITORING our activities generate dust, contaminated vapours and odour. environmental impact from construction activities that may the natural local environment around our project sites. [305-7] We ensure that the perimeters are within DOE limits. Total result in dust and noise generation, waste materials generation, suspended particulates (TSP) are monitored on a biweekly, soil and water contamination, damage to public drainage At the forefront of our operations, we go by three Construction activities that contribute to air pollution monthly or quarterly basis depending on the requirement. TSP systems, destruction of plants, birds and terrestrial fauna, etc. environmental objectives at our project sites to ensure the include land clearing, operation of diesel engines, demolition, reading across all our project sites ranged from 26 to 250 µg/ As our nation continues to develop, the construction industry sustainability of our construction activities throughout the burning and working with toxic materials. As one of the m³ which is within the limit set by the DOE which is 260 µg/ will continue to impact the physical environment as long as construction phase as illustrated. leading construction companies, we conduct 100 per cent m³. the industry demands natural resources. To overcome this environmental monitoring across all our projects in order to challenge, we include several key practices that are targeted Furthermore, we have crafted a comprehensive environmental monitor, detect and where possible, minimise any adverse Nitrogen Oxide (NOx) and Sulphur Oxide (SOx) are also to reduce our impact on the surrounding environment in the management programme which includes regular inspections, environmental impact. Furthermore, open burning is strictly parameters used by SunCon to monitor the ambient air quality. long run. audits and daily site walks to monitor our performance with prohibited at all SunCon project sites. SunCon monitors the air NOx and SOx readings across all our monitoring stations are regard to minimising environmental impact at the project quality at every worksite at various stations because most of within the limit set by DOE which is 300 µg/m³. We do not have any construction projects that are located in site and ensuring compliance to environmental regulations ecologically sensitive areas. However, our on-site teams remain implemented by the government. NOx (µg/m³) Monitoring SOx (µg/m³) Monitoring sensitive to the local ecology, landforms and communities, Project Baseline 2018 2017 2016 Project Baseline 2018 2017 2016 Min Max Min Max Min Max Min Max Min Max Min Max MRT V201 <1 <1 <1 <1 12 <1 4 MRT V201 <0.5 - - <1 12 <1 4 KLCC P1 <56 3.8 12.5 <5 14 <5 <5 KLCC P1 <5 <5 <5 <5 <5 <5 <5 KLCC P2 <5 <5 <5 <5 <5 <5 <5 KLCC P2 <5 <5 <5 <5 <5 <5 <5 MANAGE LRT3 <0.5 <0.5 1 - - - - SVMC N/A - - <5 <5 N/A N/A
6 NOx (µg/m³) at KLCC P1 was monitored at 4 stations = the baseline at 2 • Avoid • Segregate construction • Create awareness station was <5, 12.5 and 3.8 environmental waste at project sites of good pollution at by type environmental NOISE MONITORING project sites • Encourage 3R practices practices at Noise during construction and building works can be a engaging communities around our construction site for a and disposal at project sites designated areas. nuisance to local residents and businesses as our projects, collective solution. although being hoarded up, are still within close proximity to PREVENT IMPROVE the public and residential areas such as Bandar Sunway, Klang, Noise levels are measured during day and night at different and Bandar Sri Damansara. Measures are taken by SunCon monitoring stations for every construction site. The noise to demonstrate our responsibility to the community and level readings are taken on a monthly or quarterly basis to regulatory agencies. These measures include limiting night be reported to the DOE as required by the Environmental work activities to those that do not generate noise above Assessment Plan. general limit, installing noise barriers at receptive areas and
ENVIRONMENTAL COMPLIANCE Management System which we have benefited in Project Noise Monitoring (Day) Noise Monitoring (Night) [307-1] remaining commercial, successful without disregarding our environmental responsibilities. Our environmental impact General Limit : 65 dB(A) General Limit : 55 dB(A) In SunCon, we enforce strict compliance and are committed such as efficient use of resources, pollution reduction and Baseline Average Baseline Average to meet the statutory requirements as stipulated by the lower waste generation while striving for the company’s MRT V201 66 67 62 63 Department of Environment (DOE) Malaysia. Adequate growth. Our commitment to the conservation and protection LRT3 68 70 64 66 trainings are also conducted regularly to ensure our staff of the environment is accentuated through our QESH and workers are made aware of the requirements and policy, which addresses our obligations in the prevention of KLCC P1 76 70 71 66 consequences of non-compliance. environmental pollution, management of construction waste KLCC P2 78 69 74 63 and conservation of resources by performing a systematic Parcel F 61 61 50 54 Building on our effort to remain in compliance to regulatory environmental aspect and impact evaluation, implementing compliance, we are also certified to ISO 14001 Environmental the operational controls and providing necessary trainings. SMC 4 65 65 59 61 SVMC 69 70 63 63 KJ P1 61 67 N/A N/A GDC P1 67 63 65 60
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MANAGING OUR ENVIRONMENTAL IMPACTS (cont’d)
ENVIRONMENTAL COMPLIANCE (cont’d) Project Compliance Average Minimum Maximum Average EMISSIONS • SCOPE 2 Limit Baseline [305-1, 305-2, 305-3] WATER MONITORING Purchased electricity that is consumed by SunCon [306-5] ER 50 5 ND 960* 5 Reducing vehicle emission is part of a larger SunCon strategy are reported as Scope 2. The overall electrical energy MRT V201 50 50 ND 34 50 to tackle the negative health and environmental effects of air consumption and the resulting carbon emission increased On a monthly basis, we measure the total suspended solids LRT3 50 19 ND 31 13 pollution created by our activities. in 2018 compared to 2017. (TSS) in water bodies located within or near our project Sunway 100 71 10 188** 71 sites to maintain compliance to environmental regulations Our emissions accounting is based on the GHG Protocol CO Emissions from Purchased Electricity GEOLake 2 enforced by the Department of Environment (DOE). We record classification of direct and indirect emissions. The GHG the TSS levels at final discharge points from our project sites Big Box 50 48 ND 2963*** 16 Protocol Corporate Standard classifies a company’s direct and 1 182 8 into any waterways to ensure continuous compliance with KLCC P1 50 50 ND 48 50 indirect emissions into three ‘scopes’. By using these 3 types DOE regulations. of scopes, we convert emissions of GHG from SunCon activities KLCC P2 50 50 ND 32 50 (such as using diesel for machinery and electricity bill) using Parcel F 50 50 ND 49 50 the emissions accounting. The table below presents water quality monitoring data of 201 201 2018 final discharge points at our project sites. SMC4 100 100 70 95 83 SCOPE CATEGORY INDICATOR EMISSIONS Sunway 50 48 5 161** 48 Project Compliance Average Minimum Maximum Average MEASURED SOURCE Serene As part of Sunway Group’s commitment towards Limit Baseline Direct Company Company reducing electricity consumption, motion sensors have GDC P1 50 19 ND 40 19 ER 100 71 17 203* 55 1 owned vehicles owned controlled been progressively installed at office areas, pantries and and machinery resources MRT V201 150 11 7 124 32 * High reading due to heavy rain and silt trap not maintained at ER. Corrective washrooms at Menara Sunway since October 2018. This action which requires maintenance has been conducted initiative aims to reduce electricity wastages through ** High reading arise from one-off event due to heavy rain at Sunway GEOLake Indirect Electricity Purchased LRT3 50 27 19 75 56 unattended switches and constant lighting at common and Sunway Serene GHG Energy Sunway 100 5 5 25 10 2 areas which are not occupied all the time. Savings on *** High reading is one-off event due to heavy rain and inefficient silt trap Emissions GEOLake design at Big Box. Corrective action to re-design silt traps and maintenance electricity consumption at floor levels occupied by SunCon has been conducted CP3 100 - 8 18 11 Other Air Travel Transport not at Menara Sunway will be covered in the next reporting cycle. ISKL 50 50 20 185* 87** 3 Indirect owned by Frequent maintenance on our silt traps ensures that the GHG company The TSS limit stipulated by DOE is to remain within the 50 to 150 mg/l threshold erosion and sediment control measure functions as per its Emissions * High reading arise from one-off event due to heavy rain at ER and ISKL design capacity effectively. • SCOPE 3 ** High average reading as only 2 sets of reading available due to project completion. Average was skewed by one-off high reading due to rain event • SCOPE 1 Scope 3 includes all other indirect emissions that occur in a OUR STRATEGY TO ADDRESS CLIMATE CHANGE company’s value chain. For example, air travel for business- Diesel is one of our main fuel used to power our machinery related activities which involve aircrafts that are not owned In the event of high TSS readings detected at the monitoring The construction industry is bound to have detrimental impact and vehicles such as backhoe, crane and excavator. Based by SunCon. The emissions for 2018 increased as the travel stations, we take immediate remedial actions to rectify the on the calculation, our carbon emissions has increased. frequency increases due to business demand. issue and conduct an evaluation on the current management on the environment. Every activity in the construction project life cycle, from manufacturing and transporting of building This is mainly due to the increasing number of on-going procedure to reduce TSS discharge. CO Emissions from Air Travel materials to the installation and construction of buildings, projects. 2 consumes energy and emits greenhouse gas (GHG). 8 CO 2 Emissions from Company-Owned Vehicles and SILT TRAPS At SunCon, we are working to reduce our carbon footprint by Machines, Tonnes examining key areas and pivotal opportunities which we can Silt traps are constructed at project sites to control erosion take advantage on. These include the use of low embodied 1 8 1 0 particulates from entering waterways that surround our carbon building materials, energy efficient plant and 1 28 201 201 2018 project sites and sedimentation risks associated with land machinery, and environmentally friendly fuel, where they are clearing and building activities that would agitate the linchpins to a construction project. existing soil structure. The following table presents the water Restate monitoring data of discharge points at our silt traps. 201 201 2018
Frequent maintenance of our silt traps ensures that the traps are not blocked and continue to effectively filter large solid particulates. In addition to complying with the regulations mentioned in the water monitoring section, our silt traps are constructed to ensure compliance to the Environmental Quality as imposed by Perbadanan Putrajaya for Water Pollution Control in Parcel F and GDC P1 projects due to its location being in the Putrajaya district.
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MANAGING OUR ENVIRONMENTAL IMPACTS (cont’d)
OUR STRATEGY TO ADDRESS CLIMATE CHANGE (cont’d) • Recycle and Reuse Hydraulic Oil and reliability and extend lubricant life. We managed to set Fluid life extension and recycling is an important strategy a new benchmark of service schedule oil change interval up CLEAN ENVIRONMENT that provides opportunities for significant cost savings to 1,000 hours, instead of regular service hours of 350. The [302-1] while encouraging positive environmental stewardship. analysis for the machines to operate for 500 hours without Used oils can pollute the environment if they are not oil change was a complete success. SunCon’s business operations heavily revolves around machinery and equipment. Below are SunCon ongoing programmes that recycled or disposed properly. promote productivity and minimise our operation’s impact on environment. In 2018, we embarked on an initiative to recycle and OUR SUPPORT FOR GREEN TECHNOLOGY • Fuel Consumption reuse hydraulic oil for all our machines. However, the Since January 2018, all Company owned machinery remaining used oil that is not recycled is disposed by an Since 1981, SunCon has continually strived to keep in pace Decrease and vehicles switched from Euro 2 to Euro 5 diesel with Engine Increase appointed licensed scheduled waste collector registered with technological advancement and innovation demands lower carbon / CO emission to the environment. This is Engine with Department of Environment (DOE) in compliance with to remain at the cutting edge of the construction industry. 2 Maintenance Performance in line with the Environmental Quality (Control of Petrol Cost requirements as stipulated in the Environmental Quality Being the construction arm of Sunway Group, we endeavour and Diesel Properties) (Amendment) Regulations 2015 (Scheduled Wastes) Regulations 2005. to support Sunway Group’s commitment to the 17 SDG Goals, which describes the Government’s requirements towards specifically in the areas of providing means to affordable and controlling air quality. Benefits of clean energy and building sustainable cities and communities. EURO 5 BENEFITS OF RECYCLING AND REUSING USED OIL The Euro 5 standards further restrict emissions, including Keeps it from polluting soil and water • Moving into the Sun carbon monoxide (CO), hydrocarbons (HC), oxides of Ecowalk project is the maiden solar power initiative within nitrogen (NOx) and particulate matters (PM), which are Reduction Increases machine reliability Sunway City as part of our new venture into renewable considered harmful to human health. Euro 5 diesel is an 95% of PM of 50% from energy sources. Connecting key pedestrian areas such ultra-clean fuel with an extremely low sulphur content of captured by 50mg to Recycling waste into usable products as Menara Sunway, Sunway Lagoon Club, Palm Ville the engine 25mg of CO only 10 ppm (parts per million), compared to 500 ppm for 2 Condominium and Sunway Medical centre, the Ecowalk Motor oil does not wear out and therefore recycling it Euro 2. roof is covered with solar panel installations which was saves valuable resources completed in June 2018. Solar panels were also installed on the roofs of Sunway University and Monash University to harness solar power as alternative energy source for daily • Machine Renewal and Revitalising Programme our productivity, saving time on site and boosting safety HYDRAULIC OIL RECYCLING INITIATIVE 2018 building operations, amplifying the Group’s commitment The main bulk of the CO2 emissions amount produced over and positive environmental impacts. to clean energy. SunCon prides itself as the appointed the lifecycle of construction equipment is during machine TOTAL TOTAL PERCENTAGE contractor with technical expertise for the installation operation, which accounts for approximately 90% of the New machineries purchased are environmental friendly, in CONSUMPTION: RECYCLED: RECYCLED: and commissioning of solar system within the Group and total. Acquiring fuel and energy efficient machinery is one that they are highly fuel efficient and equipped with the will continue to expand our influence while venturing % of the solutions to help in our business operations and also latest technology. Thus, they help in reducing CO2 emissions 12,098 5,749 47.5 into various opportunities on renewable energy. Sunway helps the environment. considerably and help reduce SunCon’s carbon foot print. LITRES LITRES Engineering Sdn. Bhd. tendered for the Large Solar Scale (LSS) 2 and will continue to pursue for LSS 3 in 2019 as we SunCon Machine Renewal Programme is one of our key Our Revitalisation Programme replaces machinery parts are committed to serve the renewable energy sector. indicators for significant financial investment in our capital to prolong the life span of the machine while working in • Lifespan Prolongation of Machine Engine Oil expenditure (CAPEX). This programme has been established fit condition. This preventive action is taken each time the Prolongation of machine engine oil benefit in reducing • Green Construction to evaluate the repair and maintenance costs of our fleet machine has worked for more than 10,000 hours to ensure spent lubricating oil (SW305) and also filter rags, plastics, Green Building Index (GBI), Leadership in Energy and of machines and decommission any that are not cost- that the machines are working optimally and avoid major papers or filters contaminated with scheduled wastes Environmental Design (LEED) and GreenRE certifications effective. As a result, this programme helps in increasing breakdown. 10 plants and machineries underwent this (SW410) by reducing service downtime and increasing are no longer new to the construction industry. Hence, it is programme in 2018. service interval. In a year, the general service needed for important for us to keep abreast with the latest technology normal oil is 8 times but with 1000H engine oil, the general and updates as sustainable and smart buildings are service is reduced to 3 times per year depending on site becoming our clients’ must-have selling points. 2018 project working hours. Tipper Truck Boring Machine Green building certifications are assessed based on the Total Newly 5 4 Increasing the longevity of oil is one of our initiatives in following categories: reducing waste and conserving resources. Lubricant testing • Energy efficiency Rough Terrain Crane Purchased Skylift and oil condition monitoring was conducted to minimise • Indoor environmental quality Machinery: 29 5 3 costly down-time and repairs, enhance the equipment life • Sustainable site management • Materials and resources Water Truck Crawler Crane • Water efficiency 4 3 • Innovation 4 Lorry Crane 1 Tower Crane
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MANAGING OUR ENVIRONMENTAL IMPACTS (cont’d)
OUR STRATEGY TO ADDRESS CLIMATE CHANGE (cont’d) CONSTRUCTION MATERIAL In recent years, we have begun to introduce modular formwork, [301-1] a building material that requires less timber girders. Moving OUR SUPPORT FOR GREEN TECHNOLOGY (cont’d) Green building features reduce or eliminate potential negative forward, we aim to continually reuse our timber girders, impacts to the environment at the design and operations Across the construction industry, there has been a push effectively reducing the need for new timber supply, to ensure • Green Construction (cont’d) stage. To ensure that we commit to the green building for sustainable building practices – from material sourcing that efficient materials such as formworks are prioritised over In SunCon, we have in-house experts to study on the requirements and implement the initiatives, we apply four to design – to ensure building longevity with respect to its non-renewable material. assessment criteria, type of technology being considered, targets to the projects we build – environmental impact and impact on economic, social and environmental outcomes for development of effective strategy in meeting the clients’ sustainable Return of Investment (ROI), direct financial ROI, the future generations. Practical and technical aspects of requirements and diligent execution throughout the creating a liveable facility and maintain a higher property environmental sustainability, relate to resource efficiency GREEN CONSTRUCTION MATERIAL project duration. We have successfully trained 4 certified value. and waste elimination, and draws together various aspects of [301-1] GBI Facilitators, 2 GBI Commissioning Specialists and 2 minimising resource consumption. GreenRE Managers. With the pool of talents we have in Materials are essential components of buildings construction. the organisation, we are confident that we can provide top Construction for commercial purposes, including transportation The design of green buildings should thus begin with the notch services and solutions to our clients in the area of Environmental impact infrastructure involves the use of a considerable amount selection and use of eco-friendly materials. Sustainable Green Building construction. and Sustainable ROI of sand, construction aggregate, cement and concrete. We building material can contribute to lessen the impact of 4 measure the amount of core building materials used for each environmental degradation, and generate healthy buildings To date, we have completed 10 Green Building projects with project to ensure that we maintain our building costs and which can be sustainable to the occupant as well as our 2 more ongoing. Direct Financial ROI sustainable sourcing. With every project we undertake, we environment. seek to optimise resource use and maintain a good balance Completed Projects Details 3 in adapting to modern construction practices without Increasing Building Quality with ALC Blocks PZ10, Everly Hotel GBI NRNC Certified compromising on the quality and durability of the building ALC Block is a unique and excellent type of building material & Office A More Liveable Facility materials. due to its super heat, fire and sound resistance. ALC blocks are lightweight and offer ultimate workability, flexibility Sunway Pinnacle Tower GBI NRNC Certified & Green 2 Ready Mix Concrete (RMC) and durability. ALC Block can help reduce at least 30% of Mark Gold We use RMC to reduce our dependence on conventional environmental waste, decrease 50% of greenhouse radiation Sunway Pyramid GBI NRNC Certified & Green A Higher Property Value concrete and because of its proven durability in extreme and over 60% integrated energy on the surface of brick. Phase 3 Mark Gold 1 environment with low sensitivity to impurities which enables They are environmentally friendly because they are easy Sunway Geo Tower GreenRE Certified the use of recyclable by-products to produce more RMC to cut precisely, therefore reducing solid waste and related for future projects. A percentage of the RMC is made of manufacturing carbon dioxide emissions. International School GBI NRNC Platinum waste materials and carbon dioxide sequestering materials, Kuala Lumpur (ISKL) properties which conventional concrete material lack. Low Volatile Organic Compounds Paint as Eco Option KLCC Package 2 GBI NRNC Gold & LEED BIODIVERSITY AND CONSERVATION Volatile Organic Compounds (VOC) are emitted by different Platinum RMC consists of predetermined mixture of cement, gases and solids such as paints and lacquers, paint strippers, A resilient natural environment is vital to the sustainable aggregates, water and admixtures. Minerals admixture used cleaning supplies, pesticides, building materials and Afiniti Johor - CIMB GBI NRNC Certified development of businesses. Biodiversity is vital to maintain a are fly ash (FA), a form of by-product generated from coal- furnishings, and craft materials including adhesives and Leadership Academy resilient natural environment. fired electricity power stations and ground granulated blast permanent markers. SunCon provides environmental-friendly Afiniti Johor - Somerset GBI NRNC Certified • Analyse the potential impact and develop mitigation furnace (GGBS), a form of by-product generated from iron products by using the low VOC paints as gases emitted by Medini measures if risks to biodiversity is identified. and steel making industry, therefore paving the way for the paint is considered one of the top five hazards to human Afiniti Johor GBI NRNC Certified • Before developing site construction, biodiversity waste recycling opportunities. To date, 40% of our RMC are health. - Wellness Centre assessment is conducted to reduce our impact. using those mineral admixtures as a cement replacement for • Comply to all environmental regulatory and meet permit better quality, reducing the carbon monoxide and increasing Environmentally Friendly Lighting Sunway Southern GBI NRNC Certified conditions regarding biodiversity management. concrete durability. SunCon chooses Light Emitting Diode (LED) Light as one Region Office • Making sure to control all the clearing activities and of our elements in green building products to minimise the implementing offset or relocation programme if Timber environmental impacts. LED lights use 80% less energy than unavoidable habitat disturbance occurs. Ongoing Projects Details Timber is commonly used in construction because it is a high- incandescent lighting. Also, they do not contain hazardous performance material, light in weight, yet with excellent load materials such as toxic mercury and have longer lifespan, Parcel F GBI NRNC Gold We are taking positive steps at our Sunway Southern Region bearing and thermal properties. To ensure the structural which can reduce frequency of disposal of lamps. LRT3 (GS07-08) GBI NRNC Silver projects in protecting the environment by preserving and integrity of our projects, our internal team of design engineers avoiding development on river buffer zones plus: focus on maximising the use of prefabricated wall formworks, which require the support of timber girders to reduce the risk • The natural mangrove areas within at least 50 metres of of material damage or loss. Through proper storage methods the boundary of the project areas; and in the warehouses, we ensure that the timber girders stay dry • The Straits of Johor and Pendas River. and is appropriately packaged for reuse.
134 135 Sunway Construction Annual Report 2018 Sunway Construction Annual Report 2018
MANAGING OUR ENVIRONMENTAL IMPACTS (cont’d)
WASTE AND DISCHARGES • Construction Waste • Scheduled Waste the graph below. Our records show that in 2018, a lower [306-2] volume of scheduled waste was generated for SW305, Our environmental impact is also defined by the waste that is Scheduled waste requires appropriate waste storage, SW307, SW311, SW408 and SW410. generated at our project sites. SunCon recognises that: Waste generation is directly proportionate to the scale of recordkeeping and disposal methods as outlined by the a project and directly impacts our business operations if Environmental Quality (Scheduled Wastes) Regulations In compliance with the requirements outlined by DOE in • There is a direct connection between waste generation and irresponsibly managed. We monitor the three main types 2005. the Environmental Quality (Scheduled Wastes) Regulations consumption and business growth of construction waste that are generated – steel bars, 2005, we manage our scheduled waste through sound • Waste going into landfill represents a substantial loss of concrete, timber and domestic waste. The graph below The volume (m3) of scheduled waste generated at 13 of recordkeeping, monitoring, storage and disposal by licensed materials displays the amount of waste (tonnes) that was generated our projects in 2016, 2017 and 2018 are presented in contractors at designated landfills. from 14 of our ongoing projects for 2018. We minimise waste generation at all worksites by managing it on-site as effectively and efficiently as possible. It is also In 2018, our scope of measuring construction waste has part of our management system to implement the Waste been revised to refine our waste data collection methods TYPES OF SCHEDULED WASTE RECORDED BY VOLUME , KG Management Plan at all worksites to drive the reduce, reuse and include Construction Material and Domestic waste and recycle culture through systematic waste segregation as categories at the project sites. Therefore, we will present the 8 201 FY2018 construction waste quantitative data for SunCon we aspire to divert waste generated from landfill. 201 as a baseline data to be compared in future reporting. The Our operation team on site is responsible to monitor, record graph below represents the construction waste that was 2018 and report our waste generations as part of our commitment generated in 2018 at our project sites by type. in minimising our environmental impact of our operations. 2 1 CONSTRUCTION WASTE GENERATED AT SITE, TONNES 1
WASTE MANAGEMENT PRACTICES 12 18 1 1 [306-2, 306-3, 306-4] 828 1 Our operations generate a variety of waste, including 2 0 construction, municipal and scheduled waste. Our objective 2 0 is to effectively manage the waste that is generated at 1 1 2 1 1 00 0 0 0 0 0 11 the construction sites in a manner that is in line with DOE’s regulatory requirements. This chart illustrates SunCon’s SW 305 SW 307 SW 309 SW 311 SW 408 SW 409 SW 410 overall waste management process. Spent Spent il water aste oil Conta inate soil ispose Ra s plastics Steel ars Concrete i er lu ricatin oil ineral oil i ture slu e e ris or atter containers papers or ilters ue to clean up o wit c e icals conta inate wit Any waste material disposed directly into the landfill would c e ical spills pestici es or sc e ule waste lead to substantial loss of potentially reusable material or wastes sc e ule wastes contributing to a negative impact on the environment in the STEP 1 STEP 4 long term. To manage this, we diligently record the types of e increase in S 0 is ue to i pro e awareness o sc e ule waste ana e ent an operational e an s at pro ect site Waste Waste Storage waste we generate, by weight, and apply added measures to Segregation • Non-hazardous segregate our waste for recycling purposes. • Solid waste waste • Recyclable and • Hazardous We continue to ensure that scheduled waste is responsibly disposed at pre-approved sites by the DOE to avoid contaminating reusable waste waste the environment and appoint licensed contractors who are skilled in handling scheduled wastes material. • Hazardous waste STEP 5 • Chemical Spills and Leakages STEP 2 STEP 3 Waste Using Technology that Minimises Disposal Construction Waste Chemical spills that occur on our project sites would require reporting to relevant authorities in the event of a significant spill. Waste Waste • Pre- Our investment in Virtual Design and Construction For this financial year, we recorded zero significant chemical spills at all our project sites. Year on year, we maintain chemical Collection Transport approved (VDC) since 2010 has benefited us as such that our control methods via appropriate labelling, handling and storage on site. We also ensure any oil leakages from our plant and • Licensed landfill construction wastage generations are within the machinery are contained and disposed as scheduled waste to avoid any potential spills from contaminating the surrounding contractors • Recyclers allowable percentage. The use of Building Information environment. Model (BIM) has allowed us to detect potential internal and external clashes before construction begins, thereby reducing the amount of rework which would contribute to considerable amount of construction waste going into the landfill.
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MANAGING OUR ENVIRONMENTAL IMPACTS (cont’d)
REDUCE, REUSE AND RECYCLE (3R) In the coming years, we continue to move towards responsible Project Water Saving Initiatives FLOOD PROTECTION AND MITIGATION [301-2] waste management by considering initiatives that would [201-2] further reduce our waste output or improve our 3R efforts at KLCC • Accumulated rainwater on ground level In recent years, the concept of 3R has been proposed for the HQ building and our project sites. is channelled into collection tanks to be We acknowledged that our activities may have the construction waste as well as office waste management, used for skim coating works potential to create unfavourable water diversions to • Water extracted from wells as measures which relates to three main concepts namely reduce, reuse the communities around us. Our infrastructure projects, and recycle. WATER to reduce height of water table is used [303-1, 303-2] for wheel washing facilities on site MRT and LRT are most susceptible to these situations. • Office As sections of the project may be located in flood prone We encourage the habit of recycling amongst employees Water is a key aspect to any construction project. Although Parcel F • Water pumped from Putrajaya Lake for areas, coupled with unpredictable weather conditions and visitors to the HQ by strategically placing recycling bins SunCon does not operate at any areas that experience water dust suppression on internal roadway to in Malaysia, one of our biggest risks is flooding in common areas that are heavily and regularly used such scarcity, we remain vigilant of our consumptions and strive prevent air pollution reduces dependency events. SunCon is committed to ensure that any as the pantry. One aspect of our recycling activity that we to reduce our water footprint through the implementation of on main water supply possibility of flooding events is reduced or prevented actively monitor is the recycling of paper. We measure the best practices. To ensure responsible consumption of potable • Recycling and reusing of water at wheel totally as we recognised that these events will cause water onsite, we concentrate our efforts on installing high- weight of paper that is used against the weight of used washing facilities on site great inconvenience and property damages to the efficiency low-flow water fixtures to reduce wastage through paper that is sold to a third party for recycling. Apart from communities around us. It is our practice to establish recycling our papers, we have also converted the usage of minimising discharge and exploration of alternative water MRT V201 • Water pumped from site sedimentation Flood Protection Plan where studies were conducted to all 80gm papers to 70gm papers. Thinner paper is made of source for our construction activities. We are also engaging pond is use for road washing works, less wood per sheet, hence save trees and contributes to our employees, contractors and their workers continually water browsing and wheel washing identify flood prone areas along the alignment, rainfall the reduction of negative biodiversity impact. Furthermore, to emphasise on the importance of water conservation and facilities which reduces dependency on data of these areas, flood prevention measures and paper used at our office and project worksites are responsible consumption. main water supply. Total Suspended contingency plans. Implementations of the prevention Programme for the Endorsement of Forest Certification Solid (TSS) level of water used has been measures are followed up closely by project team (PEFC) certified which is an organisation dedicated to The graph below illustrates our water consumption between ensured to be within the limit members while our Environmental Officers will conduct promoting Sustainable Forest Management. 2016 to 2018. inspections to ensure all areas are covered. The Flood Protection Plan is updated regularly or as when 3 • Project Site WATER CONSUMPTION, M necessary to capture any changes of updates. We inculcate the culture of reuse via the following 8 1 initiatives: 00 02 • Steel plates/timber waste repurposed as cage stoppers, signage material and cement mixing containers; 2 1 • Concrete reused as crusher run as a cost-effective measure to create alternative driveway at our construction sites 201 201 2018
201 201 2018
(The data was collected through the monthly monitoring of water bills)
* Restated
Maintenance of Silt Trap as Part of Erosion and Sediment Control Plan
138 139 Sunway Construction Annual Report 2018 Sunway Construction Annual Report 2018
ENSURING SAFE AND QUALITY CONSTRUCTION
To create a safe and healthy working environment for all employees and prioritise quality construction. ENVIRONMENTAL, SAFETY AND HEALTH (ESH) AWARDS AND RECOGNITION COMMITTEE “Quality, Environment, Safety and Health, Our Culture, [403-1, 403-2] Our Shared Commitment” • Award-winning firm for • Top national provider for safe, We are in compliance with the requirements of Occupational The Malaysian Society for Occupational Safety and Health responsible practices in affordable, accessible and Safety and Health Act 1994, which includes the setting up (MSOSH) gives due recognition to all organisations which have environmental, health and sustainable transport systems and of an ESH committee when there are 40 or more persons achieved commendable safety and health records and shown safety. buildings in Malaysia. employed at the place of work. There is an ESH committee at improvement in occupational safety and health processes. • Comprehensive health • Contributes to increasing road every SunCon project site. The Project Manager assumes the coverage and screening safety through the expansion of position of the Chairman of the Committee and the Safety and At the MSOSH Awards 2017, a number of SunCon Projects for employees. public transport. Health Officer assumes the position of the Secretary. received Gold Class I, Gold Class II and Silver Awards. • Provides access to adequate, safe and affordable housing fabricated The committee is made up of employer and employee from local materials. representatives. SunCon staff are nominated to be part of the committee as employer representatives and every MSOSH AWARDS 2017 subcontractor will be represented as employee representatives. HIGHLIGHTS It is our minimum requirement that the ESH Committee meets Gold Class I Award Parcel F monthly to discuss issues in relation to ESH. The meeting will • SunCon’s project sites are all certified under OHSAS • Achieved Best QLASSIC and High QLASSIC awards with commence with inspection of workplace by all committee Gold Class I Award GDC P1 18001 an average QLASSIC score of 73.6% members, follow by discussion and development of short and Gold Class II Award MRT V201 • Zero life loss • Yearly increase in all internal quality rating like SQMS long-term action plan to resolve ESH findings. • Average monthly OSH inspection scores of 81.91% and Trade Rating Silver Award Sunway Velocity Medical Centre SunCon has 348 staff serving in the Silver Award The Big Box At SunCon, we promote a culture of safety where the safety • To prevent environmental pollution, managing construction ESH Committee across all SunCon of our colleagues, families and friends are a priority. SunCon’s waste and conserving resources through environmental project sites and various subsidiaries, Quality, Environment, Safety and Health (QESH) Management aspects and impacts evaluation, implementing operational which accounts to approximately System is an integrated management system that conforms controls and training. 24% of total SunCon workforce. to international standards such as ISO 9001, ISO 14001 and • To prevent accidents, near misses and health hazards OHSAS 18001. through systematic hazard identification, risk assessments, determining controls and training. Our QESH policy reflects the Company’s fundamental thrust towards inculcating total quality, environment, safety and Chairman OUR COMMITMENT TO GOOD ESH GOVERNANCE HLEC Structure ato r r o ari in asri health management principles, practices and values. As part At SunCon, Environmental, Safety and Health is Our Passion, Our Pride. We strive to ensure that all our operations are conducted of our continuous effort to develop, implement and maintain in an environmental friendly, safe and healthy manner not only for our workforce, but also for the communities around us. This good occupational safety, health and environmentally-friendly Secretary a or R eon message is resonated through functions below to all our business partners which requires their strict adherence at all times while practices in its construction activities, we inculcate a corporate working in our project worksites: culture that is aligned with its QESH objectives. Members It is the policy of SunCon Group of Companies to meet 1. Compliance to 2. Safe Work Method 4. Provision of 6. Compulsory and satisfy the quality, environmental, safety and health ESH statutory Statement for safe system Personal requirements of its clients through the following: atu C un u r An a Assoc ro requirements all activities of work Protective wan Soo uc inti r S a sul a ri Equipment (PPE) • To ensure that all staff are effective, efficient and consistent o wai ion in lias o a rin in the performance of their duties and responsibilities • Occupational Safety • Safety helmet and by providing requisite leadership, training, support and 3. Implementation 5. Continual HIGH LEVEL ENVIRONMENTAL, SAFETY AND and Health Act chin strap motivation. of Permit to learning HEALTH COUNCIL (HLEC) (OSHA) 1994 • Full body harness • To optimise total costs by doing things right the first time Work System through • Factories and • Reflective vest and every time. awareness In 2018, the HLEC continues to spearhead the development Machinery Act (FMA) • Safety footwear • To strive towards a ZERO life loss at all project work sites. • Hot work and on-the-job and implementation of ESH strategies and policies which aim 1967 • Hearing protection • To continually improve and innovate to achieve the highest • Scaffolding training to improve SunCon’s ESH performance. Led by Dato’ Ir Johari • Environmental Quality and ear plugs standards of work quality and service excellence. Act (EQA) 1974 • Working at Height Bin Basri, Senior Independent Non-Executive Director of SCG • Eye and face • To continually improve environmental, safety and health • CIDB Act 520 • Excavation who is the Chairman of the Council; the Council visited our protection management practices. • All related regulations • Confined Space project worksites regularly and had 4 meetings in 2018. Issues • Hand protection • To comply with applicable, environmental, safety and and guidelines • Lifting discussed include emerging challenges in ESH implementation • Night work • Dust mask health laws, legal and other requirements. relating to construction industry and accident prevention measures arising from lesson learnt within our walls, or the industry as a whole. 140 141 Sunway Construction Annual Report 2018 Sunway Construction Annual Report 2018
ENSURING SAFE AND QUALITY CONSTRUCTION (cont’d)
ACCIDENT/INCIDENT MANAGEMENT What is in SunCon Safe Work Method Statement 2. Traffic Management Plan mechanism of a tower crane where meter hour box is We investigate every accident and incident that occurs to Besides the Project Environmental, Safety and Health installed to ensure targeted and timely replacement of Resource management identify its root cause before mapping future corrective and Plan, Traffic Management Plan is developed based on major components to be carried out. With this precision preventive actions. Report findings and lessons learnt in Relevant training required legal requirements and technical guidelines in relation maintenance system, our tower cranes are operating respective areas including Building, Civil, Geotechnical and Comprehensive hazard identification to road safety to ensure hazards and risks arising from safely at all times, reducing the possibility of adverse road diversions and road closures on public users have effects or accidents. Engineering are circulated to key personnel and reported to Risk assessment and risk control both senior management and HLEC. been identified, controlled and reduced to a level of as Environmental aspects and impacts evaluation low as reasonably practicable. The implementation of 4. Complaint Management System (CMS) and SunCon In the handling and investigation of accidents and incidents Traffic Management Plan is monitored by a trained and Hotline WhatsApp Service at the corporate office, building and civil engineering projects, competent Traffic Management Officer. In addition, the Complaint Management System (CMS) SunCon has a procedure which refers to guidelines such as: A formalised set of best practices are also in place to reduce is established at MRT and LRT projects which serve as construction risks at our workplace. 3. Ensuring machinery safety through risk assessment, a platform for public road users to lodge feedbacks • ISO 14001:2015 Clause 10.2 machinery pre-delivery inspection (PDI), routine on issues encountered along the project alignment or • OHSAS 18001:2007 Clause 4.5.3 • Addressing Public Safety inspection and preventive maintenance inconveniences caused by our construction activities. All • Notification of Accident, Dangerous Occurrence, Occupational We acknowledged that risks created from our construction The Guidelines for Public Safety and Health at these feedbacks are managed effectively by the project Poisoning and Occupational Disease (NADOPOD) Regulation activities are not only affecting the internal workforce, Construction Site, 2007 published by Department team members, which include engaging stakeholders 2004 but also members of public who are near or adjacent to of Occupational Safety and Health (DOSH) serve as to find a practical and satisfactory solution for both our property boundary or to any public areas where our a cornerstone for all work practices in our effort to parties. The CMS is monitored by our Project Delivery SAFETY AND HEALTH STATISTICS activities are being carried out. ensure the safety and health of people within our Partner (PDP) for both MRT and LRT projects, where [403-2] work sites and surrounding areas. Comprehensive risk the response time and time frame for complete 1. Safe work procedures and safe work method assessment is compulsory to identify hazards and risks rectification are KPIs set for all Work Package Contractor The safety and health statistics throughout our ongoing statements arising from the activity and control measures put in (WPC) by PDP. In 2018, SunCon received 48 and 126 projects from 2016 to 2018, and our safety performance in As our operations are regulated by Occupational Safety place to minimise the impact of consequences should feedbacks from MRT and LRT project respectively and 2018 against SunCon targets is shown in the Sustainability and Health Act (OSHA) 1994, safe work procedures and hazards materialise. Pre-Delivery Inspection (PDI) is an all feedbacks were managed and rectified within the Performance table. Our statistics incorporates man-hours safe work method statements are established, serving inspection system designed to ensure all machinery agreed timeframe. A similar system, the SunCon Hotline and accidents data compiled for staff, direct workers, and as guiding principles for all our construction activities. are in safe and good working condition prior delivery WhatsApp Service has also been established to serve contractors’ workforce working at all our project sites. These procedures and method statements are a double- to project site. This has allowed timely intervention as a platform for public members and communities edged sword where they not only aim to realise the for unfit machinery to be delivered to project site and around SunCon project worksites to provide feedback SunCon defined Lost Time Injury (LTI) accident where the philosophy of the Act: responsibility for safety and obtain replacement of new unit. Routine inspections are for improvement. This hotline was launched in year injury sustained prevented any person from his normal health at the workplace lies with those who create conducted at site level whilst scheduled maintenance by 2017 and is monitored and controlled at SunCon HQ occupation for 4 calendar days or more as guided by OSH the risks and those who work with the risk; they are competent inspector is conducted to ensure our plant where the details of the feedback received shall be (NADOPOD) Regulations 2004. In 2018, we recorded 2 LTI also developed as such that public safety is our utmost and machinery is in good working condition. SunCon disseminated to respective project worksite for follow accidents. Thorough investigations were conducted for both priority, specifically for our infrastructure projects which has established a system to monitor critical moving up actions. accidents to identify the root causes for the incident and are normally located in the right-of-way of public roads. corrective measures have been implemented. The findings and preventive measures were shared across all SunCon project worksites through Safety Alerts which are available in e-copies or at ESH information board on site and accident sharing sessions to ensure such incidents do not recur.
SAFETY HAZARD IDENTIFICATION, PREVENTION AND MITIGATION “To achieve ZERO life lost” is one of the Key Performance Indicators (KPIs) in the annual year-end appraisal for all SunConians.
To ensure that everyone contributes to achieve this goal, a structured management system which includes measures and practices especially in the engineering and administrative controls have been developed at all operational levels.
Safe Work Method Statement is communicated to all personnel who are involved prior to work commencement. This Backhoe Operator Competency Training for Safe statement is also accessible through the Group’s Knowledge Work Procedures Management portal. Traffic Management Plan along Jalan Kuala Selangor - MRT Line 2 Package V201, Sri Damansara West Station
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ENSURING SAFE AND QUALITY CONSTRUCTION (cont’d)
HEALTH AND SAFETY AWARENESS • Collaboration with Malaysia Productivity Corporation cooperation from National Council for Occupational Safety (MPC) - Safety and Health (NCOSH) and Sunway Construction Sdn. Bhd. ESH AWARENESS PROGRAMMES On 25 October 2018, Sunway Construction Group Berhad With our client, Sunway Integrated Properties for Sunway NAME DATE DESCRIPTION signed a Memorandum of Understanding (MoU) with Serene project, we believe that the implementation of Malaysia Productivity Corporation (MPC) to develop 5-S OSHCIM throughout the project lifecycle will boast positive ESH Townhall at 31 July 2018 SunCon organised its first ESH Townhall for LRT3, Package GS07-08. The Manual and Assessment Criteria for Construction Industry. impact in ensuring sustainability of our business operations. LRT3, Package event was also the first townhall organised by a Work Package Contractor The MoU was signed by Dato Ir Johari bin Basri, Senior GS07-08 (WPC) of LRT3. It demonstrates SunCon’s commitment and seriousness in Independent Non-Executive Director, Sunway Construction • Zero Larvae, Zero Dengue addressing ESH issues in our business operations by sharing and inculcating Group Berhad and Datuk Mohd. Razali Hussain, Director We continue to strive for “Zero Larvae, Zero Dengue” at a strong safety culture within our organisation. General, Malaysia Productivity Corporation witnessed by all project worksites through the implementation of a Dr Ong Kian Ming, Deputy Minister of International Trade structured Four-Pronged Anti-Dengue strategy. This anti- and Industry and Mr Chung Soo Kiong, Managing Director dengue strategy was materialised in year 2016 and has ESH Campaign 26 - 27 April 2018 The campaign was held to reinforce ESH awareness, to appreciate workers Sunway Construction Group Berhad. been extensively implemented at all project sites. Since the at Parcel F for their continual support in upholding ESH in their daily task and to inception of this strategy, notices received from federal and celebrate the successful partnership with our client at Parcel F. This collaboration aims to establish new standard for the local authorities on vector issues has reduced tremendously. construction industry in Malaysia. The assessment system Through the years, the exercises required in this strategy Mega OSH 2 May 2018 SunCon participated in a record-breaking feat of Mega OSH Toolbox 2018 developed will influence the enhancement and improvement have been improved continually at site level to ensure total Toolbox which was held simultaneously worldwide. The event which was organised of the efficiency and productivity of the construction eradication of dengue cases. by the Malaysian Society for Occupational Safety and Health (MSOSH), industry as a whole while creating a systematic, safe and was held in conjunction with the World Day for Safety and Health at Work healthy workplace. SunCon Four-Pronged Anti-Dengue Strategy: 2018 marked by International Labour Organisation made it to the Malaysia (i) Fogging Book of Records with the largest simultaneous safety toolbox talks. • Launch Ceremony of Pilot Projects for Compliance (ii) Search and Destroy Approximately 2,060 staff and workers from 8 SunCon project sites, namely to Occupational Safety and Health in Construction (iii) Gotong-Royong SVMC, MRT V201, LRT3, KLCC P1, KLCC P2, ISKL, GDC P1 and Big Box joined Management (OSHCIM) Guideline - Safety (iv) Anti-Dengue Awareness and Communication more than 52,000 participants across 800 premises in the country to raise Sunway Construction Sdn. Bhd. was selected as one of awareness on the importance of good ESH governance and management. the six pilot projects in Malaysia to implement OSHCIM We are also actively and voluntarily participating in the guideline. The OSHCIM Guideline was established to outline Communication for Behavioural Impact (COMBI) programme the responsibility of all stakeholders such as clients, championed by State Health Department for our projects in ESH Week at 2 May 2018 In conjunction with World OSH Day 2018, SunCon organised an ESH Week designers and contractors to work together in ensuring the Klang Valley region. Our anti-dengue strategy is in line with MRT V201 at the MRT V201 project. The event was participated by more than 300 safety and health of a construction project site. COMBI guidelines and have received commendable feedback SunCon staff and workers. With the theme of ‘Driving Towards Zero from State Health Officers. Incidents’ the goal of the event was to heighten the focus on work safety. The OSHCIM Guideline was officially launched on 12 November 2018 where the launch ceremony was held at We are committed to achieve “Zero Larvae, Zero Dengue” at During ESH week, SunCon raised awareness about safety and health, Sunway Serene project site organised by the Department all project worksites not only to protect our workforce, but conducted quizzes related to safety, gotong-royong and rewarded staff and of Occupational Safety and Health (DOSH) with the also the communities around us. workers who achieved good safety performance.
ESH Campaign 19 September 2018 The campaign was held to create ESH awareness at GDC P1 and to ESH Competent Personnel in SunCon at GDC P1 appreciate the business partners and workers for their continual support towards ESH. 30 SHO 4 Malaysian 3 Certified Professionals 1 Certified Erosion, registered with Certified Inspector of in Scheduled Waste Sediment and Storm Health 2018 Health screening was conducted at project LRT3, Sunway GEOLake DOSH Sediment and Erosion management (CePSWaM) Water Inspector Screening Residences, TNB HQ by physician from Sunway Medical Center. Control (MY-CISEC) (CESSWI) Approximately 380 staff and workers were screened for blood pressure and glucose. Staff and workers tested for high blood pressure and / or glucose level were referred for follow up at local clinics. ESH standards and implementations related training conducted in 2018 for SunCon workforce over 5,551 hours.
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ENSURING SAFE AND QUALITY CONSTRUCTION (cont’d)
PROJECT QUALITY QUALITY ASSURANCE AND STANDARDS TOTAL QUALITY MANAGEMENT (TQM) [416-1] We consider standard setting and certifications as important SunCon’s TQM is a comprehensive and structured approach to organisational management that seeks to improve the quality of The rise in urbanisation and growing infrastructural needs benchmark towards meeting our aspirations for quality, products and services through ongoing refinements in response to continuous feedback. are leading to increasingly large-scale constructions, offering safety and sustainability. SunCon Group is certified for many interesting project opportunities for SunCon. With all Environmental Management System Requirements (ISO our projects, we strive to create a balance between cost, time 14001:2015), Occupational Health and Safety Management and quality. We have the necessary checks and measures to Systems Requirements (OHSAS 18001:2007) and for Quality ensure good construction quality management. Management System (QMS) Requirements (ISO 9001:2015). By qualifying for these certifications, which involves a rigorous INNOVATION In 2018, CIDB recognised our efforts in quality construction process of third-party audits and verifications, we have gained nno ate to create alue an a set enc ar or usinesses by conferring two SunCon projects with QLASSIC achievement the trust of our key stakeholders to deliver safe and high- awards. quality construction.
The table below lists the SunCon subsidiaries and the respective EMPLOYEE CIDB AWARDS 2018 scope of operation for which they have been certified. otal in ol e ent an e ployee satis action (for projects assessed in 2017) Subsidiary Scope Standards Date awarded High QLASSIC Achievement Sunway Provision of ISO 9001:2015 19 July 2018 Sunway Lenang Heights Construction design Sdn. Bhd. management and OHSAS 4 July 2018 Best QLASSIC Achievement Award - construction 18001:2007 CONTINUOUS IMPROVEMENT Residential for Category D services for Continuously i pro e wor processes to a i ise pro ucti ity (Public, Commercial or Industrial building and civil ISO 14001:2015 4 July 2018 an eli inate wasta e Building with Centralised Cooling System engineering works (Project Value > RM100 million)) TOTAL QUALITY Sunway Medical Centre - Tower C Sunway Provision of ISO 9001:2015 1 March 2018 MANAGEMENT Geotechnics design PHILOSOPHY (M) Sdn. Bhd. management ISO 14001:2015 1 March 2018 The QLASSIC scores we received for other SunCon projects are and construction PRODUCT AND SERVICES listed in the table below. services for OHSAS 5 March 2018 assion or pro ucin a a ily o pro ucts an ser ices to geotechnical 18001:2007 engineering works a i stan ar QLASSIC Score Update in 2018 Project Assessment Dates Score Sunway Provision of ISO 9001:2015 27 December Engineering design 2018 Sunway Citrine February 2018 80% Sdn. Bhd. management and Apartment construction ISO 14001:2015 27 December Sunway Velocity March 2018 67% services for 2018 CUSTOMER Office mechanical, Always stri e to satis y custo ers nee s an e pectations M3 July 2018 77% electrical and OHSAS 26 October plumbing works 18001:2007 2018 ISKL August 2018 74% CP3 August 2018 70% Sunway Design, production ISO 9001:2015 8 November CSR Concrete and supply 2017 (Service Apartment) Co itte to ser in t e co unity an en iron ent Products (S) of precast OHSAS 30 October 2017 Pte. Ltd. components 18001:2007 ISO 14001:2015 2 January 2018
Sunway Design, production ISO 9001:2015 1 November The three aspects of TQM are the Sunway Quality Merit System (SQMS), the Quality Assurance Support Team (QAST) and other Precast and supply 2017 sustainable improvements that are continuous and deemed successful. Industries of precast Sdn. Bhd. components
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ENSURING SAFE AND QUALITY CONSTRUCTION (cont’d)
SUNWAY QUALITY MERIT SYSTEM (SQMS) Monthly SQMS assessments for all projects cover trades The graph below presents SunCon’s workmanship ratings for 2018, and it is worth noting that as of June 2018, the trade rating including piling, reinforced concreting, precast installations, for painting (wall), painting (soffit), RC work–building and floor hardener improved from that of last year. SQMS was introduced to enable the systematic measurement steel structures, brickwork, plastering, painting and other of project quality level. The SQMS assessment covers critical architectural finishing works. The SQMS assessment categories WORKMANSHIP RATING 2018 areas of a project from product workmanship to document are reviewed and updated from time to time. management. It is based on QLASSIC requirements for the measurement of product workmanship and ISO 19001 In 2018, the following changes were implemented to the i er loorin 70% 27% 3% standards to measure the effectiveness of inspections and weightage of different assessment categories to focus more document/record management. It helps standardise project on physical workmanship and to strengthen the in-process ilin 80% 20% practices for branding and image by establishing the quality inspection, thereby improving the quality standard. infrastructure for all projects and creating awareness on Carpet 86% 7% 7% product quality as per QLASSIC requirements. S i coat So it 25% 63% 12%
RC or uil in 52% 33% 15%
The graph below captures SunCon’s SQMS scores from 2014 to 2018. Overall, SQMS scores shows improvement with an average lasterin S i coat 34% 48% 18% score of 84.4 per cent in 2018 which is higher than that of 2017. Celin laster 60% 20% 20%
loor ar ener 38% 38% 24% YEARLY COMPARISON OF SQMS SCORE aintin So it 18% 41% 41% 8 0 0 loc wor 12% 35% 53% 8 8 80 82 8 8 0 aintin all 6% 38% 56% Ceilin Suspen e 40% 60% 2 8 0 1 8 oo o erate oor
Besides SQMS assessment, we also conduct pre-QLASSIC assessment towards the end of a project to identify weaknesses and to focus on areas for improvement prior to the actual QLASSIC assessment.
8
201 201 201 201 2018
ini u a i u ean St e
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ENSURING SAFE AND QUALITY CONSTRUCTION (cont’d)
KAIZEN QAST Roles and Responsibilities We continue to integrate the Kaizen philosophy and culture of continuous improvement throughout our operations. The Kaizen approach is described in the table below.
The Kaizen Approach 1 Maintain the standards of 4 Compile and review the ISO 9001:2015 Quality the project’s Risk and Step 1: Brief overview of the issue Management System Opportunity Register and Background & Current Situation (QMS) company-wide. Project Quality Plan. Step 2: Desired outcome and specific target of what the team Set Goals / Targets intends to achieve
Step 3: Analyse current method and find out the root causes with Conduct Root Cause Analysis the facts and data to support the issue
Step 4: Create an effective action plan for implementation in order Compile and analyse the 2 Assist and establish 5 Develop Action Plan to achieve the goals/targets Client and Consultant the QMS for new Satisfaction Survey on Step 5: Implement the proposed solution projects awarded. a yearly basis. Implement Solution Step 6: Evaluate the effectiveness of the Kaizen Activity by Measure, Compare Results & Follow up Action comparing the results achieved before and after solution implementation
Coordinate Internal 3 6 Facilitate the External Quality Audit (IQA) which Quality Audit (EQA) is conducted every year Using this approach, in 2018 we implemented the following activities: conducted by for all departments and Certification Bodies. active/completed projects.
7 Upgrade the transition to new ISO Reduce wastage for cementitious items Waste segregation 17025: 2017 General Requirement A Kaizen activity was implemented to An improved system of managing construction for the Competence of Testing and improve storage and handling of waste was implemented at the project site resulting Calibration Laboratories which cementitious items, which successfully in better awareness of waste segregation among consolidate the Project Lab Accreditation resulted in reduced wastage of cementitious workers and improved project housekeeping scores items at the project site. in the Sunway Safety Merit System (SSMS). based on the MRT Line 2 model.
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HUMAN CAPITAL DEVELOPMENT
Our strategic organisational development interventions focused on growing, engaging and sustaining a workforce that enables Integrity Humility Excellence SunCon to achieve its business aspirations and goals; and that empowers, facilitates and supports our employees to develop purposefully in their careers, to become leaders in their own right, and to reach their fullest potential. We believe in doing the right thing We believe in being humble, We take pride in all that we do at all times polite and respectful We conduct ourselves in an honest We never stop learning. We strive to deliver high quality and trustworthy manner. products and services. • Increased the number of • Provides quality employment and Malaysian professionals and emphasises on work-life balance We act professionally, ethically We care for and respect people We continuously innovate and workers with technical and through activities organised by and honourably. and the environment. improve for greater progress. soft skills which is important the SunCon Social Club. We ensure our actions are consistent We seek first to understand, We seek to inspire others to excel. to foster entrepreneurship and • Provides decent work to all with our words. then to be understood. leadership capabilities through employees regardless of Learning and Development gender, age or race and equal programmes and having a remuneration for work of equal provision for study leave. value. To enable continuous growth, a key consideration is to examine human resources risks and opportunities on a regular basis. • Established a Training Academy • Reduces the proportion of In 2018, the risk register for the social aspects of our business discussed the risks that were observed, the possible negative that delivers certified technical unemployed Malaysian youth and consequences if not addressed and the corresponding mitigation measures. training for heavy construction education or training through the machinery mechanics. SL1M programme. Risks Expectations Outcome Mitigation Measures Staff Minimal turnover High staff turnover disrupts More robust Operations Workforce Planning, • Women are represented in turnover of high-performing, work progress and incurs more including periodical meetings to review higher-level positions including high-potential investment in recruitment manpower gaps and map possible internal the Board of Directors. staff staff deployment plan or external recruitment • Promotes respect, equal Adverse impact in project time plan treatment and non- and cost, reducing business discrimination for all employees performance Ensure more timely, effective and purposeful without regard to race, religion, engagement sessions between managers and gender, age, nationality or employees disability which is expounded in SunCon’s Code of Conduct. Succession Available Loss of competent key drivers Transform our succession management to key successors and will disrupt work progress and practice into a more robust and talent- positions healthy pipeline lead to work delay centric process of talents to ensure business Impact P&L and shareholder Senior Management to review talent pipeline HIGHLIGHTS and operational returns intervention on a continuous rather than leadership annual basis • SunCon’s ranking in the 100 Leading Graduate • A total of 36 SL1M trainees were employed as sustainability Employers’ in Malaysia has leaped from 32nd in 2017 to Permanent and Contract staff upon completion of their Timely identification and hire from external if 22nd in 2018 programme key role successor is not available internally
• Hired a total of 85 SL1M trainees on an 8-month • Number of man-days dedicated to formal classroom Illegal Comply with legal Non-compliance to legislation Tighten internal controls by enforcing regular programme training in 2018 was 2,321 days for 820 participants foreign and contractual will disrupt work progress when checks in CLQ. Enforce stringent subcontractor workers implications authorities impose stop work management governing their workers, and disruptions orders, put directors’ corporate educating and updating subcontractors of to business, responsibility at stake and affect regulatory compliance through briefings operations and company reputation and by imposing strict penalties for non- personal liability compliances SunCon upholds its responsibility as a corporate citizen; aspiring to be an integrated, dynamic and reliable leader in the civil construction sector. We are constantly looking to attract and retain competent and dedicated employees who can contribute to the growth of the Company. Our employees are a source of pride – loyal, capable, empowered and most of all, united by a shared corporate vision and core values.
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HUMAN CAPITAL DEVELOPMENT (cont’d)
Another key aspect of the risk analysis were the opportunities that were identified, which have been enumerated in the table HIRING FROM LOCAL PUBLIC AND PRIVATE UNIVERSITIES below. We recognise the need for accreditation and the benefits an accreditation system can bring to good governance and compliance. Local Universities Private Universities Risks Expectations Negative Outcome Mitigation Measures Universiti Malaysia Pahang, Universiti Malaya, University of Nottingham, Australia National Competent More capable Overall productivity will be Redeployment and expansion of roles - Universiti Malaysia Sarawak, Universiti University, Monash University, Sunway workforce and productive affected identified employees will be given exposure in Tun Hussein Onn Malaysia, Universiti University, Universiti Tunku Abdul Rahman, workforce at all different projects and stretch assignments in Putra Malaysia, Universiti Malaysia Perlis, Curtin University College, Heriott Watt levels Lead to rework and project delay addition to their core roles Politeknik Ungku Omar, Consist College, KLIA University College, Imperial College London, Professional College, Universiti Teknologi Infrastructure University Kuala Lumpur, UCSI Direct impact to client satisfaction Set up training centre to enhance Malaysia, Universiti Sains Malaysia. University, Universiti Tenaga Nasional. and repeat business employees’ skills Accreditation Comply to legal Skills are validated leading Ensure respective site supervisors’ current of site requirement to enhanced work quality / work assignments tally with trade to be supervisors and promote productivity accredited Organisational Adaptability, Value Driven Professional, and a competent SKIM LATIHAN 1MALAYSIA Grooming & Etiquette. This training is delivered through 2 days workforce Schedule assessment /interview in accordance of classroom training and 8 months of on-the-job exposure. to the right trade for site supervisors In growing our young Malaysian talents, we have worked with government agencies such as Talent Corp and the Malaysian SunCon registered with SL1M in September 2017 and in 2018 Accreditation Comply to legal Skills are validated leading Ensure workers’ competency tally with trade Economic Planning Unit to deliver training initiatives that will we hired a total of 85 SL1M trainees. of workers requirement and to enhanced work quality / to be accredited enhance young graduates’ employability in the job market. promote competent productivity On 8 and 9 August 2018, we conducted two training sessions workforce Schedule workers for assessment in One of such initiative is the Program Skim Latihan 1Malaysia for SL1M trainees at the Sunway Leadership Centre. These accordance to the right trade (SL1M), which is under the purview of the Malaysian Economic sessions covered topics such as soft skills development in Planning Unit. This programme aims to provide a platform for communication and creative/analytical thinking ability. On specific targeted groups of university degree graduates who 6 July 2018, we had graduated our very first batch of SL1M trainees who spent close to eight months of training with HIRING OF INTERNS are either unemployed or come from low-income families HIRING OF LOCAL TALENTS SunCon. We have built strong collaborative partnerships with public/ or rural areas. The trainee’s development will cover critical areas such as Communication, Creative & Analytical Thinking, Our preference for hiring from the local talent pool spurs the private universities and polytechnic schools such as Politeknik local economy and increases job opportunities in the Malaysian Ungku Omar to provide work-based learning and internship job market. We also believe in providing opportunities to programmes at our project sites. The following table shows the experienced and talented locals because they are best suited for number of internships which we have offered and converted the job, being more familiar with the market needs in Malaysia. some of them into our pool of permanent staff.
HIRING OF EXPERIENCED TALENTS Year Number of Number of Interns Having numerous large construction projects on the run, we Interns Placed Converted into seek to hire experienced local talents to join us in expanding Permanent Staff our horizon. We have provided job opportunities to talents 2016 134 24 from various background and experience. From supporting departments to operations team, our hiring positions ranged 2017* 264 29 from Clerk, Machine Operators to Engineers and Project 2018 205 5 Managers across different divisions. In total, we have provided Grand Total 603 58 127 job opportunities to the local talents, 13 of which were Managerial position and above. * Restated
Connected REHIRED 205 with more than 3 to UNIVERSITY 9.6% 22 PRIVATE 6-MONTH students placements of the total interns completed their AND LOCAL that we have offered Graduation of First Batch of Trainees for SL1M Programme internships at UNIVERSITIES a placement in in Malaysia SunCon in 2018 SunCon since 2016
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HUMAN CAPITAL DEVELOPMENT (cont’d)
GENDER Maternity leave in 2018 Paternity leave in 2018 SunCon has been collaborating with CIDB on a pioneer ONBOARDING FOREIGN WORKERS [401-3] programme for the application of MS 2593:2015. The local In 2018, we recruited an additional of 522 workers from Number of women 26 Number of men who 73 authorities regularly inspect the CLQs throughout the year Indonesia who possess basic construction skills. Before this Worldwide, the construction industry is known to be male who took took paternity leave and have been satisfied with the cleanliness and functionality recruitment, we had a total of 383 existing foreign workers dominated. We recognise that it will be some time before maternity leave of the facilities. who had been with us for more than 2 years. we have a balanced proportion of men and women at the Number of women 4 Number of men who 2 workplace most notably in the lower-level positions given the who left (within a left (within a year) SunCon embraces a culture of respect, diversity and equal Length of Tenure Number of Workers physical nature of the work. We do not discriminate between opportunity, and safeguards the wellbeing and human rights year) after after paternity leave More than 10 years 4 14 gender and we hire candidates who are best suited for the job maternity leave of its entire workforce, which is described in our Code of on meritorious grounds which is clearly stated in our Code of Conduct. More than 5 years 147 Conduct. With regard to wages and compensation, it is clearly stated More than 2 years 222 In line with the recommendations of the Malaysian Code FOREIGN WORKERS MANAGEMENT in our Environmental and Social Requirements for SunCon’s Upon arrival of the workers in Malaysia, they are given safety on Corporate Governance 2016, we are conscious of the Direct Workers, Suppliers, Contractors and Subcontractors that and legal briefings by our Safety & HR team. Subsequently, importance to increase female representation in SunCon’s compensation must comply with the Workers’ Compensation The construction industry is labour intensive and in 2018, they will attend medical check-up by FOMEMA to be certified Board of Directors (“Board”). We believe that diversity in Board (Foreign Workers Compensation Scheme) (Insurance) Order foreign workers made up approximately 40% of our total and ensured that they are fit to work. Also, they were enrolled composition is an important driver of a Board’s effectiveness. 1996 and/or the Social Security Insurance and/or employer’s workforce. Ensuring good working and living conditions for to CIDB Safety Course to obtain CIDB Green Card. Workers We value credibility, talent and commitment that the Board Liability Insurance and/or any other insurance with statutory workers at our project sites including the foreign workers are are also given advance allowance of RM500 as daily meal can bring to the table. Our business and professional decisions limits as requested by Malaysian law. Our respect for human priority for us. allowances for the first month. Furthermore, in order to are not influenced by unethical factors like one’s ethnic and rights is consistent with relevant national laws and the United further their development in their technical skills, they are age background. Nations Guiding Principles on Business and Human Rights in We provide well-equipped and safe workers’ accommodation sent for accreditation by CIDB. This is to ensure efficiency all places in which we operate. and amenities that have toilets, showers, a cafeteria, a futsal and effectiveness of our manual labour workforce in our Throughout the organisation, the employee strength across and table tennis court, cooking bays, washing bays, prayer construction projects. the three years listed in the Sustainability Performance table SunCon’s Commitment to Human Rights rooms, 24-hour CCTV surveillance and an on-site clinic. In is made up on average of about 85 percent men. Despite our • Pay at least the minimum wage. 2018, we had a total of 5 CLQs which are situated in the They are covered under 3 types of insurance (CIDB Insurance, practice of hiring on meritorious grounds, we have a gender • Do not use child labour. Central Region in the areas of Putrajaya, Sungai Buloh, Klang Foreign Workers Hospital & Surgical Insurance, Foreign gap. However, it is worth noting that the percentage of • Provide associates with a safe and healthy workplace. and Subang and Southern Region, in the area of Nusajaya. Workers Compensation Scheme). Foreign Workers outpatient women in management has increased in 2018 from that of • Do not use forced, prison, indentured, bonded or medical expenses are claimable from the project site up to 2017 by 2 percent. involuntary labour. RM1,000 per year. Region CLQ Location • Suppliers and contractors must not allow their workers to In order to encourage women at a workplace that has been work excessive hours. Central CLQ Dengkil Putrajaya Workers are paid according to their skill categories and in conventionally male dominated, we recognise and implement • Prompt action required by our grievance procedure. addition to the following basic salary, they are paid hourly practices of equal opportunity in terms of training, benefits, CLQ MRT Sungai Buloh • Prohibit discrimination in hiring and employment practices overtime rates that is calculated based on their basic salary. remuneration, recognition and career advancement. including gender, race, religion, age, disabilities and CLQ LRT Klang nationalities. Skill Categories Basic Pay Maternity leave is an area where we recognise as pertinent to CLQ Subang Subang • Prohibit physical abuse and harassment of associates and ensuring women have the flexibility to return to work and to threats of either. General Workers RM 1,300 per month/ ensure smooth transition without many challenges when they Southern Cobra Camp Nusajaya RM 50 per day return. We offer paternity leave of three days and maternity Our strict adherence to Malaysia’s Employment Act 1955, Semi-Skilled Workers RM 1,508 per month/ leave of 60 days. which is aligned to the labour principles of the International RM 58 per day Labour Organisation ensures the prohibition of child labour In 2018, the total number of leave days that were taken under and forced or compulsory labour throughout our operations. Skilled Workers RM 1,690 per month/ maternity were 1,538 days by 26 women. We allow maternity RM 65 per day leave beyond the paid 2 months which was utilised by 6 Effective 1 January 2018, Sunway Construction has been in women. Out of the 26 women that took maternity leave, 85 compliance with the new policy on Foreign Workers’ Levy per cent returned to work. by paying RM1,850 for every foreign worker that has been 4 Note: A group of workers had a renewal of their visa duration via a brought in under our employment. Governmental Programme that allowed for their stay above 10 years. Whereas for men, a total 214 days of Paternity leave were utilised by 73 men. Out of 73 men, only 2 employees resigned within a year after the paternity leave. However, the reasons of resignations were not due to family related reasons.
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HUMAN CAPITAL DEVELOPMENT (cont’d)
TALENT ENGAGEMENT AND EMPLOYEE WELL BEING EMPLOYEE BENEFITS [202-1, 401-1, 401-2] We believe in providing our employees with benefits that sufficiently support and facilitate greater employee well-being and work-life balance. EQUITABLE PAY effect on productivity. At SunCon, we gather feedback from With regard to remuneration, we believe in giving ‘equal our employees biennially on different aspects of their work We provide our employees with different types of leave including examination/study leave, medical and hospitalisation leave, pay for equal work done’ regardless of gender, age, race or experience including leadership, work-load and career and maternity leave. The number of leave days and various leave types that SunCon employees enjoy are listed in the table ethnicity. We comply to the National Minimum Wage required development. Assessing their satisfaction levels through below. salary which is RM1,000 for year of 2018 and will comply to these Employee Engagement Surveys is an important governmental regulatory changes in increasing the minimum indicator for identifying causes for dissatisfaction and areas Types Description Number of Days Number of wage to RM1,100 effective 1 January 2019. In terms of our needing improvement. of Leave Taken Employees highest to lowest wage ratio, it is 43:1. Our plan to increase employees’ average pay is through a lean and productive The turnover rate in 2018 in SunCon was 12 percent for male Annual Leave Up to 25 days depending on the years of service 16,542 1,531 workforce through assimilating technology into building employees and 3 percent for female employees. The turnover Emergency Leave taken on account of an emergency 7,194 1,427 construction and upskilling employees to be knowledgeable rate is higher amongst male employees at 12 percent Leave workers. With this strategy, organisation workforce can be compared to women at 3 percent which reflects the higher optimised and employees’ average pay can be increased in proportion of men in the employee make-up of the Company. Medical Leave Upon the recommendation from SunCon’s panel doctor, an 5,944 1,234 line with their knowledge and output. employee may be granted paid medical leave On the other hand, the turnover rate by age shows that Hospitalisation In the case of hospitalisation, medical leave will be extended 2,684 127 EMPLOYEE TURNOVER employees below 30 and between the ages of 30 and 50 have Leave to a maximum of sixty days in any one calendar year The issue of employee turnover has raised quite a number a higher propensity to leave. of concerns in the construction industry as a result of its No Pay Leave No pay leave may be granted at the discretion of the 2,416 337 Management. It is granted to an employee only when there is no balance of annual leave and there is a valid urgent reason to apply for leave
Maternity The Company shall pay maternity leave up to sixty consecutive 1,538 26 Leave days for five surviving children. Study/ Up to a maximum of five days paid leave in any one calendar 119 35 Examination year to employees for examination and study purposes Leave subject to prior approval.
Special Leave All employees including fixed term contract employees with minimum one year service are entitled to the special leave. The total number of special leave allowed for an employee in any one calendar year is up to a maximum of ten days. Childcare/Parent Care Leave 238 137 Death of near relative 225 91 Paternity 214 73 First legal marriage 143 49 Critical illness of near relative 34 26
We take an active interest in the health and wellbeing of of a prolonged nature which requires a long period of our employees. Medical attention, including hospitalisation hospitalisation and renders him/her unable to perform his/ is extended to all employees. The medical benefits include her duty is eligible for this leave. However, the leave is granted medical treatment and insurance coverage, health screening upon recommendation by the company doctor and discretion programmes as well as dental and optical benefits. We also of Management, and prolonged illness leave covers full pay have a provision for prolonged illness leave. A confirmed for the first six months’ period, half pay for the second six employee with a minimum of one-year service who suffers months. from cancer, leukaemia, tuberculosis, paralysis or any illness
Long service awards in recognition of employees’ loyalty and contribution
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HUMAN CAPITAL DEVELOPMENT (cont’d)
TALENT ENGAGEMENT AND EMPLOYEE WELL BEING (cont’d) LONG SERVICE RECOGNITION In 2018, we have awarded the following number of employees We recognise employees who have served SunCon for 10, 20 based on their total years of service in SunCon. EMPLOYEE BENEFITS (cont’d) Company Name Total Headcount - and 30 years by conferring service awards. The recipients Over and above the study/examination leave, we have Flexi Work will receive a certificate of appreciation and a souvenir of a Years of Service Number of Award Recipients other provisions to encourage employees to pursue studies Arrangement in designated value as determined by the Group. Employees are 10 years of service 34 employees relating to the scope of their work. This includes the tuition 2018 eligible to only one service award upon attaining the required refund scheme and the tuition fee discount. With the former, length of service. 20 years of service Nil a confirmed employee may apply for reimbursement of their Sunway Construction Sdn. Bhd. 8 tuition and examination fees subject to a maximum amount Sunway Geotechnics (M) Sdn. Bhd. 5 30 years of service 1 employee of RM10,000 and for the latter, employees may enjoy tuition fee discount up to a maximum value of RM 8,000 per academic Grand Total 13 year. ONBOARDING NEW EMPLOYEES In 2018, we hired a total of 702 employees (inclusive of Foreign Workers), of which 93 percent were men and the rest women. We also offer staff discounts on room rates at Sunway Group MD ENGAGEMENT SESSIONS All new employees are informed of SunCon’s policies, procedures and the Code of Conduct during orientation. The staff handbook of hotels and properties developed by the Group as well as In January 2018, our Managing Director had conceived and entails details regarding benefits, allowances and platforms for employee feedback including the grievance mechanism and the discount for the entrance fee to Sunway Lagoon. Depending started a string of focused sessions with employees namely sexual harassment policy, both of which the Company takes very seriously. on the employee grade, employees are eligible to allowances the ‘MD Engagement Sessions’. During the year, a total of 8 such as club membership subscription, a company car or a such sessions were conducted, with a total of 112 employees fixed car allowance and a mobile device or a mobile subsidy. having had the opportunity to get ‘up close and personal’ CAPABILITY BUILDING Our Human Resource Department performs learning needs with Mr Chung Soo Kiong. The underlying purpose for these [404-1, 404-2] analysis to ensure all employee development plans are In supporting working mothers, we also provide facilities sessions were to allow our MD to engage with our talents designed purposefully. We also sponsor high-performing for nursing mothers and also special parking privileges for in a more relaxed and nurturing setting. This forum would The construction industry is considered to be one of the employees who wish to pursue their studies through pregnant mothers. For mothers’ who wish to take extended purposefully enable more focused and open conversations most dynamic and complex industrial environments. Human our academic sponsorships that cover diplomas, tertiary, maternity leave, they are also given that option on the basis aimed at motivating participants, helping them find their resource development plays a critical role in enabling SunCon’s professional and postgraduate qualifications. of unpaid leave. Working mothers are also given work hours needed answers to better grow their careers, to address operations, in increasing workers’ adaptability and flexibility flexibility of starting early and finishing early in their day to challenges holding them back, and to become more effective and imparting SunCon’s safety culture to every employee. One In 2018, the number of man-days dedicated to training was day work hours. To date, there are 13 working mothers who professionals, and individuals. In addition, the sessions indeed of the challenges in this industry is the changing proficiency, 2.83 days on average for the 820 employees who participated are using this Flexi Work Arrangement. helped bridge senior management-employee understanding, skill and competency requirements and to overcome this, we in these formal classroom training sessions. and strengthened our organisational foundations for a more provide skill-specific training programmes on a regular basis. meaningful collaboration and sustainable growth. The training programmes that we provide to our employees SunCon’s long-term training and development plan aims to cover key aspects of leadership, worker training, ESH, quality, develop the skills of all professionals. This strategy allows machinery, construction and contract management. In 2018 SUNCON SOCIAL CLUB (SSC) ACTIVITIES SunCon to engage a more capable workforce while helping (January to December 2018), we spent a total of RM1,015,657 In order to encourage team building and facilitate cross-departmental communication, the SSC organises a range of events individuals grow their careers. on training and the average amount spent for training per including the KSS Sport Carnival Appreciation Dinner, ATV team events, Star Cruise trips and rock-climbing events. Some of the employee was RM1,239. The key programmes that were other employee engagement programmes that took place in 2018 are listed in the table below. conducted in 2018 are listed in the table below.
Name of the Date Description KEY FORMAL CLASSROOM TRAINING PROGRAMMES (2018) Programme LEADERSHIP TRAINING FINANCIAL TRAINING Water Rafting 31 March 2018 SSC organised a trip to Kuala Kubu Bharu for water rafting and paragliding Managing Misconduct at Work and Finance for Non-Finance and Paragliding activity to foster team spirit and bonding among SunCon employees. Diversity and Inclusiveness Corporate Treasury and CFO Summit Durian Festival 25 July 2018 All SunCon employees who are durian lovers were treated to a delicious Situational Leadership spread of durians at an event held at the Sunway Machinery workshop. Centre for Asia Leadership SunCon Senior 27 – 29 July The SunCon Senior Leadership team with a total of 25 participants went for LEGAL TRAINING Leadership Retreat 2018 a 3-day 2-night trip at Eight Acres, Raub. The objective of this retreat was to Strategic Business Facilitation rejuvenate and drive stronger bonds amongst our senior leaders. Situational Leadership II CIPAA Refresher Course World Capital Markets Symposium Kuala Lumpur Asia ADR Week 2018 ReThink Leadership: Tap into your Subconscious Construction Law Conference Such activities help build a greater sense of identification and pride in the Group thus enabling better rapport among employees and Lead Inclusively and further improving work quality. Furthermore, the Sunway Social Clubhouse, located in Menara Sunway is fully equipped with Sunway Leadership Conference all forms of recreational facilities such as gymnasium, sauna, squash court, snooker, karaoke, Astro, table tennis and carom for FOREIGN WORKER TRAINING the exclusive use of our employees. Mandatory CIDB Green Card Training
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HUMAN CAPITAL DEVELOPMENT (cont’d)
CAPABILITY BUILDING (cont’d) A total of 491 hours was expended by the SunCon senior MOVING HR FORWARD INTO THE DIGITAL AGE management team (EG10 and above) in the various training ESH TRAINING CONSTRUCTION MANAGEMENT, ENGINEERING AND BIM programmes stated above to advance in their technical skills With the current trend and direction in which technology, and strengthen leadership capability. The grand total for online automation and digitalisation plays a significant role as Lifting Supervisor Competency Training 1 Day Seminar Seismic Assessment and Retrofitting of training hours is 3,998 with the partaking of 2,672 employees. to how HR services will be delivered to our employees, Existing RC Structure ISO 14001:2015 Internal Audit Training Sunway Construction Group has embarked onto a major SunCon actively contributes to the United Nations Sustainable ISO 14001:2015 Risk Based Thinking (Risk and Seminar: Managing in Construction Enhancing transformation journey. One part of the transformation Development Goals 2030 Agenda by inculcating sustainable Opportunities ROR) Performance Towards Excellence journey involves implementing two best in class HR systems; approaches in our operations and working culture. This year, we External: The Development of Sustainable and Efficient SAP SuccessFactors and RAMCO, and integrating these two External Seminars, Talks and Conferences provide sustainability-related forums and awareness sessions Buildings in the Modern City systems seamlessly together. Train the Trainer to our employees through a programme called SDG Employees External: Programme BIM 2018 Digital Construction Authorised Entrant and Standby Person for Awareness Project. This programme educates our employees In January 2017, Sunway Construction Group had successfully Confine Space (AESP) GreenRE Manager Course via an online platform on specific United Nations Sustainable launched SAP SuccessFactors in which our employees can Development Goals that SunCon commits to. The online training Half Day Seminar on “Choosing the Right Below Ground access to the Learning, Performance Management and Scheduled Waste Awareness Briefing topics and number of participants are as listed below: Waterproofing Technologies for your Project” Employee Central modules anywhere and anytime securely at ESH Awareness Training their convenience with the cloud-based system. In addition, 1 Day Course on FEM in Geotechnical Engineering Slinging and Rigging Competency TOPICS PARTICIPANTS the Recruitment module is also assisting our HR Personnel in 1 Day Seminar on “Digital Revolution Embracing Occupational First Aid and CPR Training SDG Employees Awareness Survey 91 managing recruitment matters effectively. Technology and Keeping the Power ON” Scaffold Training (Basic / Intermediate / Advance) SDG Awareness (SDG1: No Poverty) 60 Environmental Aspects & Impacts Evaluation (EAIE) RAMCO, on the other hand, offers a fully integrated HR Seminar on Smoke Control and Management SDG Awareness (SDG 2: Zero Hunger) 279 Services solution consisting of My Leave, My Payroll and My OSHCIM Principle Designer and Design Competency SDG Awareness Claim and is presently in the progress of being implemented. Seminar on Implementation of ISO 45001: 2018 Seminar 39 (Occupational Safety & Health Management System) (SDG 3: Good Health and Well-Being ) The three modules are expected to Go Live before end of 2019 Technical Talk on CIPR SDG Awareness whereas My Time Management is expected to Go Live by mid Safety and Health Assessment System in Construction 33 South East Asian Geotechnical Conference (SEAGC) 2018 (SDG4: Quality Education) of 2020. This transformation journey is expected to bring (SHASSIC) Assessment better employee experience, higher productivity, and increase SDG Awareness 24 effectiveness in HR management. (SDG 5: Gender Equality) QUALITY TRAINING CONTRACT MANAGEMENT WHAT TO EXPECT FOR 2019 ISO 9001: 2015 Awareness Training External: Seminar on 50 Common Contractual Problems EXCELLENCE IN CAREER AND LEADERSHIP @ SUNWAY • We will continue to grow our succession bench strength and The SunCon Group aspires to grow and sustain an leadership pipeline. We will focus on our desired leadership ISO 9001: 2015 Internal Audit training Practical Construction Management, Contract organisational capability to a level where we constantly culture and behaviours to further develop managers and Administration/Management ISO 17025: Introduction deliver on our commitments to our stakeholders, and be employees who can inspire change and create synergies truly recognised as a builder and contractor of international across our organisation. standards. To achieve this, we understand the criticality of a MACHINERY TRAINING ONLINE TRAINING solid succession bench strength and hence places much focus • We will further focus on building core (functional and on efforts to strengthen our leadership pipeline particularly leadership) capabilities of our people to accelerate their Tower Crane Maintenance Checker Training Group Human Resources (GHR) Managing Leave and from internally. Our aim is to groom leaders who will be readiness to take on expanded and more challenging roles. Absenteeism at Workplace Effective Operation and Safety Training truly ready to lead, inspire, drive, develop and build a more Hydraulic Excavator Operator Competency Training How to Record Statement during an Investigation at sustainable SunCon. • We will provide greater opportunities for growing our Workplace? talents’ potential particularly for those who proactively act Backhoe Operator Competency Training to develop their careers and drive to better oneself. Industrial Relations Forum In the second half of 2018, the Management embraced a Truck Driver Safety Operation Townhall focused initiative to purposefully help ready and committed Information Security at Work Safe Lifting Operations Training employees uncover their true leadership potential. Through • We will continue to challenge the status quo and ensure My Performance Manager Evaluation User Guide (Video) this initiative entitled ‘ExCeL@Sunway (or Excellence in Career our organisation model and workforce is rationalised and Passenger Hoist Training optimised. We will achieve this through constant and more My Performance Self Evaluation User Guide (Video) & Leadership@Sunway)’, we aim to create a more focused organisational effort to support one’s career developmental robust workforce and deployment planning of our people. Sunway Code of Conduct and Business Ethics journey towards leadership and management roles in the Sunway E-Policy future. ExCeL@Sunway is focused on creating a nurturing • Towards sustainability and greater organisational Understanding Sunway Employee Engagement for environment, and a more personalised and integrated productivity, we will continue to expect from our people Employees developmental experience where one will learn to take further ethical and mindful actions, drive to achieve, open charge of his/her career and personal development. We have communication, teamwork and personal ownership. Understanding Sunway Employee Engagement for Line implemented the pilot phase of this initiative where a number SunCon remains committed to our journey to creating an Managers of identified employees have begun their developmental engaging, empowering and energising workplace for our journey in ExCeL@Sunway‘s Leadership Development Centre people. (LDC) activities.
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BUILDING COMMUNITY RESILIENCE
To support the vulnerable sections of the community and engaging the public to gather feedback to understand their concerns. In setting a strong foundation for sustainability, we have CONCLUSION established and will continue to implement robust governance, risk and compliance practices throughout our value chain. As a contractor of choice in the region, we continuously seek • Provides support towards • Organises IFTAR programme to to expand our business building on our commitment to the FEEDBACK vulnerable sections of the provide underprivileged families economic, environmental and social pillars of sustainability. [102-3,102-53] community, including the Orang with one complete nutritious meal An intrinsic part moving forward is delivering innovative Asli community in Semenyih. every day during the entire month technologies, solutions and services that add business value For further information, please contact: • Sponsors and aids deserving of Ramadan. for our customers whilst minimising environmental impacts General Manager of Operations causes to improve community and we have taken efforts in this direction. T (603) 5639 9696 wellbeing – including the F (603) 5639 9601 upgrading of school facilities. • Encourages employees to E [email protected] volunteer and contribute towards a social cause. GRI Definition GRI Definition Indicator Indicator Number Number HIGHLIGHTS 102-1 Name of the organisation 204-1 Proportion of spending on local suppliers 102-2 Activities, brands, products, and services 205-3 Confirmed incidents of corruption and actions taken • Donated RM505,000 for various community outreach programmes 102-3 Location of headquarters 301-1 Materials used by weight or volume • Setting up a platform for the public to register grievances (SunCon Hotline) 102-4 Location of operations 301-2 Recycled input materials used 102-5 Ownership and legal form 302-1 Energy consumption within the organisation 102-6 Markets served 303-1 Interactions with water as a shared resources 102-7 Scale of the organisation 303-2 Management of water discharge related impacts SunCon is committed to giving back and enriching the lives of communities around us. We work closely with community initiatives, particularly those in the public and community sectors to carry out philanthropic efforts that could benefit the public. 102-8 Information on employees and other workers 305-1 Direct (Scope 1) GHG Emissions 102-13 Membership of associations 305-2 Energy indirect (Scope 2) GHG Emissions 102-14 Statement from senior decision-maker 305-3 Other indirect (Scope 3) GHG Emissions 102-16 Values, principles, standards, and norms of behaviour 305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and other COMMUNITY SUPPORT 102-18 Governance structure significant air emissions 102-40 List of stakeholder groups 306-2 Waste by type and disposal method We contributed to various charitable causes including Sekolah Sultan Alam Shah, EPIC Home, Putrajaya Floria, Master Builders Association Malaysia, Ibu Pejabat Polis Kontingen, Religious Institutions, Traders Associations and Public Schools. 102-43 Approach to stakeholder engagement 306-3 Significant spills 102-44 Key topics and concerns raised 306-4 Transport of hazardous waste 102-46 Defining report content and topic boundaries 306-5 Water bodies affected by water discharges and/or runoff 102-47 List of material topics 307-1 Non-compliance with environmental laws and regulations More than 102-50 Reporting period 401-1 New employee hires and employee turnover 102-51 Date of most recent report 401-2 Benefits provided to full-time employees that are not RM505,000 102-52 Reporting cycle provided to temporary or part-time employees in charitable contributions to 102-53 Contact point for questions regarding the report 401-3 Parental leave 102-54 Claims of reporting in accordance with the GRI Standards 403-1 Occupational health and safety management system more than 11 organisations 102-55 GRI Content Index 403-2 Hazard identification, risk assessment, and incident 201-1 Direct economic value generated and distributed investigation 201-2 Financial implications and other risks and opportunities 404-1 Average hours of training per year per employee due to climate change 404-2 Programmes for upgrading employee skills and transition COMMUNITY ENGAGEMENT PROGRAMMES 201-4 Financial assistance received from government assistance programmes 202-1 Ratios of standard entry level wage by gender compared 405-1 Diversity of governance bodies and employees Our efforts towards building community resilience include community programmes that address various social issues/concerns to local minimum wage 405-2 Ratio of basic salary and remuneration of women to men by supporting the vulnerable sections of society, strengthening access to education, fund-raising, conducting environmental programmes as well as creating health and safety awareness. Details of our community engagement programmes are elaborated 202-2 Proportion of senior management hired from the local 416-1 Assessment of the health and safety impacts of product under the SunCon in Calendar section on pages 24-33. community and service categories 203-1 Infrastructure investments and services supported
164 165 Sunway Construction Annual Report 2018
GOVERNANCE WITH INTEGRITY
168 The Governance Framework 169 Corporate Governance Overview Statement 178 Audit Committee Report 186 Statement on Risk Management and Internal Control 191 Additional Compliance Information 192 Investor Relations (“IR”)
THE COURAGE TO GUARANTEE THE BEST
By operating with the utmost integrity in every facet of our organisation, we are confident to say we offer only the best to our stakeholders, staff, and the communities we serve.
167 Sunway Construction Annual Report 2018 Sunway Construction Annual Report 2018
THE GOVERNANCE FRAMEWORK OF CORPORATE GOVERNANCE OVERVIEW STATEMENT SUNWAY CONSTRUCTION GROUP BERHAD (“SUNCON”) The Board of Directors (“Board”) of Sunway Construction the Board and key senior management, and approves Group Berhad (“Company”) aspires to uphold good corporate the appointment of Directors. In ensuring management The Board operates within the following governance framework in order to systematically fulfil its roles and responsibilities governance principles in all that it does. The Company will continuity, the Board, through the Nomination and under the Companies Act 2016, Main Market Listing Requirements of Bursa Malaysia Securities Berhad, all relevant laws and continue to place emphasis on ensuring responsible and Remuneration Committee, also oversees the long term regulations. Relevant Board Committees are empowered by the Board to assist the Board in providing oversight over specific sustainable business practices as well as adhering to the succession planning for senior management. aspects of the governance process. highest levels of corporate integrity throughout the Company and its group of subsidiaries (“Group”) in line with our core In discharging its roles and responsibilities, the Board is values of integrity, humility and excellence. guided by its Board Charter which outlines the duties and Board of SunCon responsibilities of the Board and the delegated day-to- The Group is committed to the United Nations 17 Sustainable day management of the Group to the Managing Director. Development Goals (“SDG”), and continues to align its This formal structure of delegation is further cascaded business strategies to meet the needs of its communities in by the Managing Director to the management team. line with the SDG agenda. The Group’s commitment to strong The Managing Director and management team remain 4 Independent 2 Non-Independent 1 Managing Economic, Environment and Social practices is embedded accountable to the Board for the authority that is delegated Non-Executive Non-Executive Director throughout the Group – from its policies and social impact and for the performance of the Group. The Board Charter Directors Directors initiatives to day-to-day operations so that it delivers has been reviewed by the Board on 16 August 2018 to be enduring growth for thriving communities. The ultimate in line with the CG Code. objective is to achieve good financial performance in order Audit Risk Management Nomination and Managing to fuel long term sustainable growth and thereby, enhancing There is a clear segregation of roles and responsibilities Committee Committee Remuneration Committee Director shareholders’ value. between the Chairman and the Managing Director in order to ensure a balance of power and authority as defined in CHAIRMAN CHAIRPERSON CHAIRMAN Dato’ Siow Kim Lun Dr Sarinder Kumari Dato’ Dr Ir Johari Bin Basri Mr Chung Soo Kiong This Corporate Governance Overview Statement provides the Board Charter. an overview on how the Company has applied the 4 Independent 4 Independent 4 Independent Non-Executive Non-Executive Non-Executive relevant Principles and the extent of compliance with the The Chairman provides leadership to the Board and Directors Directors Directors recommendations of good corporate governance as set guidance to the Group. He chairs the board meetings, sets out in the 2017 edition of the Malaysian Code on Corporate the agenda items, promotes active engagement among 1 Non-Independent 1 Non-Independent Non-Executive Non-Executive Governance (“CG Code”) throughout the financial year ended Directors as well as between the Board and the Managing Director Director 31 December 2018 and up to the date of this annual report. Director. He ensures the smooth functioning of the Board including the effectiveness of the overall governance KEY FUNCTIONS systems and processes. The Managing Director is subject Assist oar in o erseein nsurin soun syste o aluatin oar an Responsi le or eetin PRINCIPLE A: BOARD LEADERSHIP AND to the control of the Board and focuses on the Group’s an onitorin internal ris ana e ent an oar co ittee e ecti eness roup s usiness EFFECTIVENESS businesses and manages the day-to-day operations of the control syste s inancial internal controls inclu in n epen ent per or ance tar et an Group as well as implements the Board’s decisions. The an accountin reportin eter inin an i enti yin irectors per or ances an i ple ent oar strate y positions of the Chairman and Managing Director are held co pliance operation an ey aterial ris s wit contri utions an policy I. BOARD RESPONSIBILITIES by different individuals. inancial ris ana e ent uanti ia le i pact to nsurin n epen ent The Board aspires to create value for the shareholders otto line on ecuti e irector and ensure long term success of the Group by focusing Settin ris tolerance le els continuin in epen ence In respect of potential conflicts of interest, the Board is on formulation of appropriate strategy, business model, wit in t e roup in Re iewin oar si e satisfied that there is no undue influence involved in all ac ie in roup s co position an trainin risk tolerance, management succession planning and related party transactions. All such transactions were strate ic oals nee s o irectors development of competitive compensation plan. It also independently scrutinised by the Audit Committee to Settin selection criteria or seeks to align the interests of the Board and Management appoint ent o new irector ensure that they complied with the Main Market Listing with that of shareholders and balance the interests of all an e aluatin per or ances Requirements of Bursa Malaysia Securities Berhad (“Bursa stakeholders. In addition, the Board sets the principles of o retirin irectors an Securities”) and the shareholders’ mandate on recurrent reco en in t eir re election business ethics and core values for the entire Group. nsurin ana e ent related party transactions. All potential conflicts of interest were disclosed to the Board and recorded in the minutes succession plannin The Board oversees the entire business affairs of the Re iewin per or ances with interested Directors abstaining from all deliberations Group. It is responsible for formulating and reviewing o ana in irector an ey and decision making. senior ana e ent a ainst a the Group’s strategic plan and direction, performance set o ey per or ance objectives, business plans of each operating units, budgets, The Independent Non-Executive Directors regularly engage in icators usin alance capital expenditures, investment proposals, compliance in discussion with senior management, Internal Audit scorecar s and accountability systems, core values and corporate Re iewin roup Re uneration Department (“IAD”), Risk Management team, External governance practices of the Group to ensure that the Group olicy to ensure co petiti e Auditors and other relevant parties to ensure that the operates with integrity and in compliance with relevant co pensation in or er to concerns and issues raised in regard to the business incenti ise ana e ent laws, rules and regulations. The Board also appoints the operations of the Group are properly addressed on a towar s ac ie in annual Managing Director, approves policies and guidelines on proactive basis. an lon ter sustaina le remuneration as well as approves the remuneration for rowt
168 169 Sunway Construction Annual Report 2018 Sunway Construction Annual Report 2018
CORPORATE GOVERNANCE OVERVIEW STATEMENT (cont’d)
PRINCIPLE A: BOARD LEADERSHIP AND In addition, all Directors have direct access to the advice a) AC effect on 1 March 2018. At the same meeting, the EFFECTIVENESS (cont’d) and services of the Company Secretaries. The Company The details are disclosed under Principle B: Effective NRC also noted the resignation of Tan Sri Datuk Dr Secretaries attends all Board meetings and are accountable Audit and Risk Management. Rebecca Fatima Sta Maria as director of the Company I. BOARD RESPONSIBILITIES (cont’d) directly to the Board, through the Chairman of the Board, on with effect from 1 March 2018. The Board also delegates certain responsibilities to the all matters to do with the proper functioning of the Board, b) NRC Board Committees, all of which operate within their including compliance with the Company’s Constitution, The Board had on 10 January 2018 combined the • Assessed the performance of the Managing Director, defined terms of reference. Notwithstanding that, the Companies Act 2016, Main Market Listing Requirements Nomination Committee and Remuneration Committee Deputy Managing Director and Chief Financial Officer Board remains responsible for its fiduciary duties. of Bursa Securities, the Securities Commission Guidelines, into a single committee namely, NRC. The NRC comprises for financial year 2017 as well as reviewed their etc. The Company Secretaries are associate members majority of Independent Non-Executive Directors. The proposed total bonus and salary increment. The Board has a formalised code of conduct and business of the Malaysian Institute of Chartered Secretaries and Chairman of the NRC is Dato’ Dr Ir Johari Bin Basri. The ethics policy (“Code”) which provides an ethical framework Administrators. The appointment and removal of the other members of the Committee are Dato’ Ir Goh Chye • Reviewed the results of the Board effectiveness to guide actions and behaviours of all Directors and its Company Secretaries are subject to approval of the Board. Koon, Dato’ Siow Kim Lun, Dr Sarinder Kumari A/P Oam assessment, Board Committees assessment, Audit employees while at work. All Directors, whether as a full Board or in their individual Parkash (“Dr Sarinder Kumari”) and Dato’ Chew Chee Committee assessment, assessment of Independent capacity, have the authority to obtain independent Kin. The terms of reference of the NRC is available at the Non-Executive Directors and Director’s peers review The Senior Independent Director is appointed to co- professional advice, when necessary, at the Company’s Company’s website at www.sunwayconstruction.com. for the financial year 2017. Based on the aforesaid ordinate the activities of the Independent Non-Executive expense. my. assessments, the NRC was satisfied with the Directors in circumstances where it would be inappropriate effectiveness and performances of the Board, Board for the Chairman to serve in such capacity. He also assists All Independent Non-Executive Directors have access to The main role of the NRC is to ensure that the Board Committees and the individual Directors. the Chairman and the Board to assure effective corporate the Managing Director and/or senior management should comprises Directors with appropriate skills, knowledge, governance in managing affairs of the Board and the there be any explanations or clarifications needed on any expertise and experience, as well as to ensure a proper • Reviewed and was satisfied with the existing size, Company. He will also be available to shareholders if they aspects of the Group’s operations or management issues. balance of Executive Directors, Non-Independent Non- structure and composition of the Board and Board have concerns relating to matters where contacts through Executive Directors and Independent Non-Executive Committees. the Chairman, Managing Director or Chief Financial Officer Board Committees Directors. The NRC is also responsible for advising the Board has failed to resolve them, or where such contact is The Board has set up the following committees to assist in on matters relating to the remuneration of the Board and • Evaluated and was satisfied with the competencies inappropriate. discharging its duties and responsibilities: senior management in order to attract the best talents in and time commitment of the Board members as well the market. as the independence of the Independent Directors. The Company also has in place a Whistleblowing Policy (i) Audit Committee (“AC”) The Independent Directors had individually and Procedures. The objective of this policy and procedure (ii) Nomination and Remuneration Committee (“NRC”) In discharging its responsibilities, the NRC has developed a confirmed their continued independence in is to provide a mechanism for all level of employees (iii) Risk Management Committee (“RMC”) set of criteria used for recruitment of new Board members accordance with the criteria set out in the Main and stakeholders of the Group to report concerns about as well as for annual Board assessment. In evaluating Market Listing Requirements of Bursa Securities. any suspected wrongdoing, inappropriate behaviour or The Committees shall operate within clearly defined the suitability of the Board members, the NRC considers, misconduct relating to fraud, corrupt practices and/or written terms of reference (“TOR”) as approved by the inter alia, the competency, experience, commitment, • Having discussed the training requirements of the abuse on a timely basis for management action. Board. The TORs are continuously reviewed and updated contribution and integrity of the candidates. In the case Directors, the NRC encouraged the Board members to ensure their relevance to the Company’s operations as of candidates proposed for appointment as Independent to attend specific training programmes in order to Any employee or member of the public who has knowledge well as for compliance with legislation and governance Non-Executive Directors, the NRC would also assess the keep themselves abreast with the rapidly changing or is aware of any improper conduct within the Group is standards. candidate’s independence in accordance with Paragraph regulatory environment and financial reporting encouraged to disclose through the following reporting 1.01 and Practice Note 13 of the Main Market Listing standards. channels: The Board Committees deliberate issues on a broad and in- Requirements of Bursa Securities. depth basis before putting up any recommendation to the • Reviewed and endorsed the retirement and re- Whistleblowing hotlines Board for decision. Notwithstanding the existence of the The NRC carried out the following activities through its election of Mr Chung Soo Kiong and Mr Evan Cheah T (603) 5639 8025 Board Committees and the relevant authorities granted four (4) meetings held in the financial year 2018:- Yean Shin, who were both subject to retirement by th F (603) 5639 8027 to a Committee under its TOR, ultimate responsibility for rotation at the 4 Annual General Meeting (“AGM”) E [email protected] the affairs of the Company and decision-making lies with (i) At the meeting held on 26 February 2018, the NRC of the Company pursuant to the then Article 107(1) the Board. The Board keeps itself abreast of the significant deliberated on the following matters: of the Company’s Articles of Association. Further details of the Code and Whistleblowing Policy matters and resolutions deliberated by each Board and Procedures are set out in the Corporate Governance Committee through the reports by the Chairman of the • Interviewed Dr Sarinder Kumari who was nominated Both of them offered themselves for re-election. Report (“CG Report”). The Code, Whistleblowing Policy and relevant Board Committees and the tabling of the Minutes for appointment as an Independent Non-Executive Based on the peer review assessment of the Procedures, as well as the CG Report are available at the of the Board Committee meetings at the subsequent Board Director of the Company. Having satisfied with performance of the retiring Directors, the NRC Company’s website at www.sunwayconstruction.com. meeting. Dr Sarinder Kumari’s qualification, experience, recommended them to the Board and shareholders th my. competencies and time commitment as well as for re-election at the 4 AGM of the Company held confirmation of her independence, the NRC had on 20 June 2018. The resolutions to re-elect the recommended her appointment to the Board for said Directors were subsequently approved by the approval. Dr Sarindar Kumari was subsequently shareholders at the said AGM. appointed by the Board and her appointment took
170 171 Sunway Construction Annual Report 2018 Sunway Construction Annual Report 2018
CORPORATE GOVERNANCE OVERVIEW STATEMENT (cont’d)
PRINCIPLE A: BOARD LEADERSHIP AND The Group Human Resources has a systematic (iii) Reviewed and endorsed the Statement on Risk effectiveness, the Board Committees and the individual EFFECTIVENESS (cont’d) program to identify, train/mentor the next echelon Management and Internal Control to be included in Directors via peer assessment. Based on the results of the of future leaders. The NRC conducts an annual talent the Company’s Annual Report 2017. assessments made, the Board was generally satisfied with Board Committees (cont’d) review with the HR General Manager as well as (iv) Approved the meeting schedule for 2019. the Board effectiveness, the performance of the Board (ii) At the meeting held on 20 March 2018, the NRC reviewing succession planning for key management committees and individual directors. deliberated on the following matters: positions across all business units. The identified II. BOARD COMPOSITION successors for top management will be presented to The Board of Directors of the Company comprised majority The Board has a policy whereby an Independent Non- • Reviewed and endorsed the NRC report to be the NRC for review and endorsement on an annual Independent Directors led by an Independent Non- Executive Director who has reached the threshold of 9 included in the Company’s Annual Report 2017. basis. Currently, all senior management have one or Executive Chairman. It comprises seven (7) members, four years’ tenure will be re-designated as Non-Independent more potential successors in one or more of these (4) of whom are Independent Non-Executive Directors, two Non-Executive Director, unless he or she has obtained • Reviewed and endorsed the re-election of Dr stages i.e. ready now, ready soon or ready later. (2) are Non-Independent Non-Executive Directors, and a shareholders’ approval to be retained in the Board as Sarinder Kumari, who was due for retirement at the Managing Director. Independent Non-Executive Director. If the Board continues 4th AGM of the Company pursuant to the then Article • Deliberated on the performance appraisal and to retain the Independent Director after the twelfth year, 90 of the Company’s Articles of Association. recommending to the Board, the proposed interim The Board recognised the benefits of having a diverse annual shareholders’ approval must be sought through bonus for the Managing Director, Deputy Managing Board for a well-functioning leadership team to strengthen a two-tier voting process. This is to facilitate the Board Dr Sarinder Kumari had offered herself for re-election. Director and Chief Financial Officer of the Company. its strategy formulation and risk management by adding renewal and hence, enhancing the effectiveness of the The resolution to re-elect Dr Sarinder Kumari was varying perspectives and insights. Board. subsequently approved by the shareholders at the • Approved the meeting schedule for 2019. said AGM. The Board composition reflects a mix of suitably qualified As at the date of this report, the Board has yet to fulfil The attendance of the NRC Members during financial year and experienced professionals in the fields of finance, the requirement of 30% gender diversity. The Board is • Reviewed and noted the KPMG Report on Non- 2018 are as follows:- construction and building materials industry, and human cognisant of this requirement and will endeavour to search Executive Directors’ Remuneration 2017. Having capital development. This combination of different for suitable and qualified women director to join the Board. Name of NRC Members Number of Meetings professions, experiences and skills working together reviewed the report, the NRC was of the view that Attended the Company’s director’s fee was in line with its enables the Board to effectively lead and control the The Board is satisfied with the level of time commitment Dato’ Ir Goh Chye Koon 4/4 peers in the construction sector. Company. A brief profile of each Director is presented on given by the Directors towards fulfilling their roles Dato’ Siow Kim Lun 4/4 pages 50 to 56 of this Annual Report. and responsibilities. All Directors have given their full commitment to the Board Meetings by attending all • Reviewed and recommended to the Board for Dato’ Dr Ir Johari Bin Basri 4/4 approval, the Board and Senior Management The Board through the NRC conducts an annual review the Board meetings held during 2018. Their meeting Dato’ Chew Chee Kin 4/4 Remuneration Policy. of the size, structure and composition of the Board, attendance at Board and Board committees’ meetings is Dr Sarinder Kumari# 3/3* directors’ competency and time commitment as well evidenced by the attendance record set out in the table as the independence of the Independent Directors. It below. (iii) At the meeting held on 16 August 2018, the NRC Tan Sri Datuk Dr Rebecca Fatima 1/1* also undertakes an annual assessment of the Board deliberated on the following matters: Sta Maria^
• Reviewed its TOR to be in line with the CG Code. Notes: Directors Board AC NRC RMC * Reflects the number of meetings held during the time the Director held office. Meeting Meeting Meeting Meeting # Appointed with effect from 1 March 2018. • Reviewed and approved the Board and Board ^ Resigned with effect from 1 March 2018. Independent Non-Executive Directors Committees’ evaluation methodology for 2018 and Dato’ Ir Goh Chye Koon 7/7 5/5 4/4 5/5 the relevant board assessment questionnaires. c) RMC Dato’ Siow Kim Lun 7/7 5/5 4/4 5/5 • Assessed the mid-year performance of the The RMC has oversight on the Company’s risk management Dato’ Dr Ir Johari Bin Basri 7/7 5/5 4/4 5/5 framework and policies. The RMC comprises exclusively Managing Director, Deputy Managing Director and Dr Sarinder Kumari (a) 5/5* 4/4* 3/3* 4/4* Chief Financial Officer. Non-Executive Directors. The RMC was previously headed by Tan Sri Datuk Dr Rebecca Fatima Sta Maria as Chairperson Tan Sri Datuk Dr Rebecca Fatima Sta Maria (b) 2/2* 1/1* 1/1* 1/1* (iv) At the meeting held on 19 November 2018, the NRC until her resignation on 1 March 2018. Subsequently, Dr deliberated on the following matters: Sarinder Kumari was appointed as the Chairperson. The Non-Independent Non-Executive Directors other members of the RMC are Dato’ Ir Goh Chye Koon, Dato’ Chew Chee Kin 7/7 N/A 4/4 N/A Dato’ Siow Kim Lun, Dato’ Dr Ir Johari Bin Basri and Mr Evan • Discussed with Managing Director, the management Evan Cheah Yean Shin 7/7 1/1* N/A 5/5 succession plan. The potential successors to each key Cheah Yean Shin. management position in the organisation was tabled Managing Director for consideration. The NRC received assurances that During the financial year 2018, five (5) meetings were all candidates identified for the senior management held to deliberate on the following matters: Chung Soo Kiong 7/7 N/A N/A N/A positions were of sufficient calibre and there was Notes: a plan in place to track their readiness in order to (i) Discussed and approved the Group’s risk appetite. (ii) Deliberated on the quarterly risk review report and (a) Appointed on 1 March 2018. provide orderly succession. (b) Resigned on 1 March 2018. discussed on the top key risks identified by the risk (c) N/A means not applicable. management working team. * Reflects the number of meetings held during the time the Director held office.
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CORPORATE GOVERNANCE OVERVIEW STATEMENT (cont’d)
PRINCIPLE A: BOARD LEADERSHIP AND directorships and the changes, if any, of each Director and Name of Directors Course Title / Organiser Date report to the Board during the Board meetings. EFFECTIVENESS (cont’d) Dr Sarinder Kumari A/P Mandatory Accreditation Programme (MAP) 9 & 10 April 2018 Oam Parkash (The Iclif Leadership Governance Centre) II. BOARD COMPOSITION (cont’d) The Board recognises the importance of training and development for the Directors to enhance their skills and In order to ensure the Directors have sufficient time to fulfil Corporate Liability Provision - Offences by employees & Others 19 July 2018 knowledge to meet the challenges of the Board. The role their roles and responsibilities effectively, the Board has and the implications on Directors, Partners and Management to review the training and development needs of the agreed that one of the criteria for potential new directors (Malaysian Institute of Accountants) is that they must not hold more than five (5) directorships Directors has been delegated to the NRC. in public listed companies. This enables them to discharge Sunway Leaders Conference 2018 5 October 2018 During the financial year, all the Directors had attended their duties effectively by ensuring that their commitment, (Sunway Group) resources and time are more focused. It is incorporated in various training programmes and seminars organised by the Company’s Board Charter that a Director is required the relevant regulatory authorities and professional bodies Dato’ Chew Chee Kin Sunway Leaders Conference 2018 (Sunway Group) 5 October 2018 to broaden their knowledge and to keep abreast with the to seek prior consent from the Chairman of the Board Evan Cheah Yean Shin Sunway Leaders Conference 2018 (Sunway Group) 5 October 2018 before he or she accepts any new directorship outside the relevant changes in law, regulations and the business Group. The Company Secretary will monitor the number of environment. Chung Soo Kiong Sunway Leaders Conference 2018 5 October 2018 (Sunway Group)
Business Transformation Challenges 23 October 2018 Training Programmes, Seminars and Workshops attended by Directors (Malaysian Institute of Corporate Governance) Name of Directors Course Title / Organiser Date 44th IFAWPCA Convention 2018 - Strategic Alliance with 12 to 15 November Dato' Ir Goh Chye Koon Sunway Leaders Conference 2018 (Sunway Group) 5 October 2018 Innovation & Human Capital (International Federation of Asian 2018 Dato’ Siow Kim Lun World Capital Market Symposium 6 & 7 February 2018 and Western Pacific Contractors’ Associations) (Securities Commission Malaysia)
MIA Audit Committee Conference 2018 27 March 2018 III. REMUNERATION The details of the Directors’ remuneration for the financial (Malaysian Institute of Accountants) The Group recognises that in order to attract and retain year 2018 are disclosed in the CG Report, which is available in Directors is to have a fair and comprehensive remuneration the Company’s website at www.sunwayconstruction.com. Environmental Conference 2018: Igniting Action For Better Tomorrow 17 & 18 July 2018 package that commensurate with their experience, skills my. (Kumpulan Wang Persaraan) and responsibilities as well as benchmarking against industry’s standards. In view of this, the remuneration MCCG Compliance Expectations: Better Reporting Integrity, 19 July 2018 package for Managing Director and directors’ fees for Non- PRINCIPLE B: EFFECTIVE AUDIT AND RISK Transparency & Accountability (Eco World In-House/ Terus Mesra) Executive Directors were determined by benchmarking MANAGEMENT against remuneration packages of relevant position with IFRS/MFRS 15 –Revenue From Contracts With Customers 19 September 2018 similar industry and business size. It is structured on (EcoWorld/KPMG) the basis of linking rewards to corporate and individual I. AC performance. The performance and remuneration package The AC comprises four (4) members who are all Independent General Data Protection Regulations 20 September 2018 of the Managing Director is subject to evaluation of the Non-Executive Directors. The members of the AC are Dato’ (EcoWorld/ DLA Piper) NRC. Siow Kim Lun as Chairman, Dato’ Ir Goh Chye Koon, Dato’ Dr Ir Johari Bin Basri and Dr Sarinder Kumari. The Chairman of Sunway Leaders Conference 2018 5 October 2018 For Independent Non-Executive Directors, the level the AC is not the Chairman of the Board. (Sunway Group) of remuneration reflects their experience, level of responsibilities and industry’s benchmark as well as The Company has a policy requiring a former key audit Independent Directors’ Programme - The Essence of Independence 29 October 2018 complexity of the Group’s businesses. The remuneration partner to observe a cooling-off period of at least 2 years (Bursa Malaysia Berhad) of Independent Non-Executive Directors consists of fixed before being appointed as a member of the AC. directors’ fees per annum and meeting allowances for Dato’ Dr Ir Johari Sunway Leaders Conference 2018 5 October 2018 every Board or Board Committee meeting attended. In the assessment and selection of the External Auditors, Bin Basri (Sunway Group) the AC is guided by the Policy on Selection of External The Board as a whole resolves on the fees for the Non- Auditors. It also monitors the provision of non-audit Asian Confederation of Institutes of Internal Auditors Conference 2018 29 & 30 October 2018 Executive Directors with individual Directors abstaining services by the External Auditors to ensure that the non- (The Institute of Internal Auditors Malaysia) from decisions in respect of their individual remuneration. audit services fees do not exceed 50% of the total audit The fees payable to the Non-Executive Directors are fees payable to them. subject to the approval of shareholders at the AGM of the Company.
174 175 Sunway Construction Annual Report 2018 Sunway Construction Annual Report 2018
CORPORATE GOVERNANCE OVERVIEW STATEMENT (cont’d)
PRINCIPLE B: EFFECTIVE AUDIT AND RISK The AC’s performance is reviewed annually by the NRC. The Company also has put in place an internal policy on shareholders’ entitlement to attend the meeting, their MANAGEMENT (cont’d) The evaluation covered key aspects such as the members’ confidentiality to ensure that confidential information is right to appoint proxy and information as to who may act financial literacy levels, ability to pose probing questions, handled properly by Directors, employees and relevant as a proxy, etc. competencies in grasping complex issues and skills and parties to avoid leakages and improper use of such I. AC (cont’d) knowledge to discharge their duties under its terms of information. The Board is mindful that information which is The Chairman provided ample time for the Questions During the year, the AC assessed the audit quality, reference. Based on the assessment for 2018, the Board expected to be material must be announced immediately. and Answers sessions in the said general meetings. All suitability, effectiveness and independence of the was satisfied with the performance of the AC. The AC the Directors together with the Managing Director, Chief External Auditors and ensures that the provision of other members had also attended various training programmes The communication channels used in the Company’s Financial Officer, management and External Auditors were non-audit services by the External Auditors was not in and seminars to broaden their knowledge and to keep engagement with its stakeholders include:- present to respond to all queries raised. All suggestions conflict with their audit function. The annual assessment abreast with the relevant progress and changes in a) The Company’s website; and comments given by the shareholders were also noted of the External Auditors encompassed areas such as law, regulations, internal control systems and the risk b) Establishment of an investor relations division; by management for consideration. objectivity and independence, competency, quality of environment in which the Company operates. c) Announcements via Bursa LINK; services, communication and interaction, audit planning, d) Annual report; In addition, any written queries raised by the Minority delivery, fees and adequacy of resources. The outcome of II. RISK MANAGEMENT AND INTERNAL CONTROL e) General meetings; Shareholder Watchdog Group will be presented to the the assessment was tabled to the AC on 20 March 2018. FRAMEWORK f) Investors, analysts and media briefings; shareholders at the general meetings together with the There were no major concerns highlighted in the External The Board is assisted by Risk Management team in g) Domestic and overseas roadshows and investors Group’s response. Auditors Assessment Report. The AC was generally identifying, mitigating and monitoring the critical risks conference; and satisfied with the performance of the External Auditors highlighted by the Business Divisions. The IAD which is h) Investor Relations Mobile Application In line with the Main Market Listing Requirements of Bursa for financial year ended 31 December 2017. Therefore, incharge of the internal audit function, assists the AC in Securities, the Company had implemented poll voting the AC had recommended for shareholders’ approval at reviewing, evaluating and monitoring the effectiveness II. CONDUCT OF GENERAL MEETINGS for all the resolutions set out in the notice of the general the 4th AGM of the Company held on 20 June 2018, the of the Group’s governance, risk management and internal The Board recognises the importance of shareholders’ meetings. The poll voting was conducted via electronic proposed re-appointment of BDO as External Auditors for control processes. participation in general meetings and encourages such means and the results of the voting were instantly the financial year 2018. participation. The AGM of the Company provides the displayed on the screen. The Company has appointed Based on the annual evaluation conducted, the AC was principal forum for dialogue and interaction between an independent external scrutineer to validate all the The External Auditors shall rotate their engaging partner satisfied with the performance of IAD for the financial year the Board and the shareholders. The participation of votes at the said general meetings. The detailed results in charge of the audited financial statements of the 2018. shareholders, both individuals and institutional at general of each resolutions tabled at the general meeting were Company and the Group once every seven (7) years to meetings on clarifications of pertinent and relevant immediately announced to Bursa Securities. maintain their independence from the Group in accordance information is encouraged. with the Malaysian Institute of Accountants’ By-Laws. This Corporate Governance Overview Statement was Nevertheless, the current audit engagement partner has PRINCIPLE C: INTEGRITY IN CORPORATE In 2018, the Company served notice of its 4th AGM more approved by the Board of Directors on 20 March 2019. held the position for only four (4) years. However, the REPORTING AND MEANINGFUL RELATIONSHIP than 28 days before the meeting, well in advance of the Board also has an option of rotating an audit firm once WITH STAKEHOLDERS 21-day requirements under the Companies Act 2016 and every five (5) years pursuant to the Group’s policy. the Main Market Listing Requirements of Bursa Securities. I. COMMUNICATION WITH STAKEHOLDERS The additional time given to the shareholders had allowed In addition, the External Auditors will be invited to attend The Company is committed to continuously disclose and them to have sufficient time to scrutinise the Annual the Company’s AGM/Extraordinary General Meeting(s) disseminate comprehensive and timely information to its Report 2017 and to make necessary arrangements to and will be available to answer any questions from the shareholders as well as to the general investing public in its attend the meeting. The Company also distributed together shareholders on the conduct of the statutory audit and effort to strengthen its relationship with the shareholders. with the notice of Annual General Meeting, information Dato’ Ir Goh Chye Koon the contents of the audited financial statements as well as on administrative details such as details of the meeting, Independent Non-Executive Chairman any corporate exercise undertaken by the Group where the The Company has in place a Corporate Disclosure Policy External Auditors are involved. which serves as a guide to enhance awareness among the employees of corporate disclosure requirements. The AC has also considered the non-audit services provided The policy outlines the Company’s approach toward the by the External Auditors during the financial year. Details determination and dissemination of material information, of the audit and non-audit fees paid and/or payable to the the circumstances under which the confidentiality of External Auditors for the financial year ended 31 December information will be maintained, response to market 2018 are shown in the table below. rumours and adverse or inaccurate publicity and restrictions on insider trading. Fees paid and/or FYE 2018 payable to External Company Group Auditors or its affiliates (RM’000) (RM’000) Statutory audit and 19 637 related fees Non-audit fees - 18 Total 19 655
176 177 Sunway Construction Annual Report 2018 Sunway Construction Annual Report 2018
AUDIT COMMITTEE REPORT
The Board of Sunway Construction Group Berhad (“Company”) is pleased to present the Audit Committee Report which provides The composition of the AC complied with the MMLR of Malaysia Securities and the principles and practices set out in the Malaysian insights into the manner in which the Audit Committee (“AC”) has discharged its oversight functions during the financial year Code on Corporate Governance 2017 (“MCCG 2017”): ended 31 December 2018. Requirements Commentary Paragraphs 15.09(1) • The AC comprised 4 members, all of whom are Independent Non-Executive Directors. TERMS OF REFERENCE (a) & (b) of MMLR This has satisfied the test of independence under the MMLR. Paragraph 15.09(1) • Dato’ Siow Kim Lun, the Chairman of the AC, has been approved and recognised by the Internal Audit (c) of MMLR Bursa Securities as a person qualified for the purpose of paragraph 15.09(1)(c)(iii) of the Audit Committee Department MMLR. Practice 8.1 of MCCG 2017 • Dato’ Siow Kim Lun, the Chairman of the AC, is not the Chairman of the Board. Practice 8.2 of MCCG 2017 • Since the incorporation of the Company on 10 September 2014, none of the members of CHAIRMAN n epen ent irector w o is not t e C air an o t e oar the Board were former key audit partners. Practice 8.3 of MCCG 2017 • The AC has policies and procedures to assess the suitability, objectivity and independence of the external auditor. At least e ers COMPOSITION Practice 8.5 of MCCG 2017 • All members are financially literate and are able to understand matters under the purview ust e n epen ent irectors of the AC including the financial reporting process. e ers ip uali ication • They have attended various training programmes, conferences, seminars and courses inancially literate organised by the relevant regulatory authorities and professional bodies on areas relevant to the Company’s business, Directors’ roles, responsibilities, effectiveness and/or corporate o alternate irector governance issues.
KEY inancial ternal nternal Au it nternal Control Relate arty FUNCTIONS Reportin Au it unction Syste s ransaction The Board, through its Nomination and Remuneration Secretary. The results of the assessment for 2018 was tabled Committee (“NRC”), has reviewed the terms of office of the AC to the NRC and the Board on 25 February 2019. The Board was PERFORMANCE members. The NRC also assessed the performance of the AC as satisfied with the performance of the AC and its members in Annual aluation y t e oar Sel an eer aluation y t e AC e ers REVIEW well as the members’ skills set, experiences and competencies which, they have discharged their functions and carried out through an annual internal AC Evaluation and AC Members’ their duties and responsibilities in accordance with the Terms Self and Peer Evaluation surveys facilitated by the Company of Reference of the AC.
MEETINGS AND ATTENDANCE A total of 5 AC meetings were held during the financial year under review. The members of the AC and their attendance record 1. Dato’ Siow Kim Lun – Chairman TERMS OF REFERENCE are as follows:- The scope of responsibilities of the AC is outlined in its terms (Independent Non-Executive Director) of reference which are set out in the Company’s website: Name of Membership Number of Percentage of 2. Dato’ Ir Goh Chye Koon www.sunwayconstruction.com.my. Committee Members Meeting Attended Attendance (Chairman of the Board / Independent Non-Executive Dato’ Siow Kim Lun Chairman 5/5 100% COMPOSITION Director) The AC currently comprises four (4) members, all of them Dato’ Ir Goh Chye Koon Member 5/5 100% are Independent Non-Executive Directors. This meets the 3. Dato’ Dr Ir Johari Bin Basri Dato’ Dr Ir Johari Bin Basri Member 5/5 100% (Senior Independent Non-Executive Director) requirements of paragraph 15.09(1)(a) and (b) of the Main Dr Sarinder Kumari (a) Member 4/4* 100% Market Listing Requirements (“MMLR”) of Bursa Malaysia Tan Sri Datuk Dr Rebecca Fatima Sta Maria (b) Member 1/1* 100% Securities (“Bursa Securities”). Members of the AC comprised 4. Dr Sarinder Kumari A/P Oam Parkash (“Dr Sarinder Kumari”) the following Directors:- (Independent Non-Executive Director) Evan Cheah Yean Shin (c) Member 1/1* 100%
Notes: (a) Dr Sarinder Kumari was appointed as member of the AC on 1 March 2018. (b) Tan Sri Datuk Dr Rebecca Fatima Sta Maria has resigned from the Board and as a member of the AC on 1 March 2018. (c) Evan Cheah Yean Shin has stepped down as a member of the AC on 1 March 2018. * Reflects the number of meetings held during the time the Director held office.
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AUDIT COMMITTEE REPORT (cont’d)
COMPOSITION (cont’d) (b) Audited Financial Statements (b) On 26 February 2018, the AC also reviewed and The following parties were invited to attend the AC meetings: On 20 March 2018, the AC together with the External deliberated on matters relating to internal control Auditors and Management, reviewed and deliberated system as highlighted by the External Auditors in Invitees Frequency of Purpose on the annual audited financial statements for the course of their statutory audit of the financial attendance the financial year ended 31 December 2017 prior statements for the financial year ended 31 December Managing Director All meetings To provide clarification on risks, internal controls and audit issues to submission to the Board for consideration and 2017. At the meeting, the External Auditors reported (“MD”) and Chief relating to the Company and its subsidiaries’ (“Group”) finance and approval. that there was no significant weakness in the Group’s Finance Officer (“CFO”) business operations. internal control systems. The AC discussed the significant audit findings, key Head of Internal Audit All meetings To present the internal audit reports, annual audit plan and audit matters raised by the External Auditors and (c) On 16 August 2018, in response to the corporate Department (“IAD”) and investigation reports, if any. the adoption of new accounting standards as well as liability provision under the Malaysian Anti-Corruption team members the disclosure required in the Independent Auditors’ Commission (Amendment) Act 2018 (“MACCA Report of the Company’s audited financial statements 2018”), IAD presented to the AC the Comprehensive External Auditors 3 meetings To present to the AC the audit plan, the audit findings, the independent for financial year ended 31 December 2017. Framework and Procedures to prevent corruption for auditors’ report as well as any other matters in respect of the Group as the Company and its group. On 19 November 2018, they considered were important for the AC’s attention. At the aforesaid meeting, the Management and the AC reviewed and deliberated on the Anti-Bribery External Auditors confirmed that the draft audited Programme and approve the formation of an Anti- Senior Management As and when To brief the AC on specific issues involving their respective areas of financial statements was prepared in accordance Bribery Task Force to facilitate the implementation of Officers necessary responsibility arising from the internal audit reports or any matters with the relevant accounting standards and statutory the Anti-Bribery Programme. of interest. requirements. Thereafter, the AC recommended the same for the Board’s approval and subsequent tabling (d) The AC received assurance from the MD and the CFO at the Fourth Annual General Meeting of the Company that the Company’s risk management and internal The minutes of each AC meeting were recorded and tabled to (i) The accounting policies and methods of held on 20 June 2018. controls system were operating adequately and the AC for adoption at subsequent AC meetings and thereafter computation adopted by the Group were consistent effectively, in all material aspects. all minutes of AC meetings were presented to the Board for with those adopted in the previous audited (c) Accounting Standards and Other Relevant discussion and notation. The Chairman of the AC reported the financial statements except for the adoption of Regulatory Requirements 3. Evaluating External Audit Process AC’s recommendations to the Board for its consideration and new or amended accounting standards that were The AC also reviewed and took note of the changes (a) The AC met with the External Auditors, Messrs BDO on implementation as well as highlighted the significant matters effective for the financial year 2018; and amendments to the regulations, accounting the following dates: and resolutions deliberated by the AC to the Board at its (ii) There were no significant and unusual issues other standards and other regulatory requirements tabled immediate subsequent meeting. than those reported in the financial statements; by the External Auditors and the CFO that could have • The AC on 26 February 2018, reviewed and (iii) The Company and the Group continued to operate a significant financial impact on the Group. deliberated with the Management and the External as going concern; and Auditors, the Audit Report by the External Auditors SUMMARY OF ACTIVITIES (iv) The accounting standards, regulatory and other On 16 August 2018, the CFO briefed the AC on the in respect of their audit for the financial year ended During the financial year ended 31 December 2018, the AC legal requirements had been complied with in new accounting standard, MFRS 16 Leases and its 31 December 2017. carried out the following activities in the discharge of its preparation of the financial statements. implication to the Group’s financial reporting, of which functions and duties as per its terms of reference:- the new accounting standard would take effect on 1 In the meeting, the External Auditors confirmed The AC reviewed the financial results and focused its January 2019. their professional independence in relation to the 1. Overseeing Financial Reporting attention on the accuracy of the reported financial audit engagement for the financial year ended 31 (a) Quarterly Financial Results figures and explanations to material variances or On 19 November 2018, the AC also reviewed and took December 2017. The External Auditors also reported At the AC meetings held on 26 February 2018, 17 movements during the relevant quarters. The AC was note of the implementation of the new accounting their audit status versus the audit plan. The AC was May 2018, 16 August 2018 and 19 November 2018, satisfied that the unaudited quarterly financial results standards i.e. MFRS 9 Financial Instruments and MFRS briefed on the key audit matters and accounting the AC reviewed and discussed with Management had been prepared in accordance with MMLR and 15 Revenue from Contracts with Customers tabled by issues which they had identified during the course the respective quarterly management accounts and the relevant approved accounting standards so as to External Auditors and the CFO. of their audit and the justifications provided by the quarterly financial results, taking into consideration give a true and fair view of the financial position of Management. that the necessary process and controls were in place the Group and of its financial performance and cash 2. Assessing Risk and Control Development in the preparation of the financial reports. flows for each quarter. The AC’s recommendations (a) The AC reviewed the Company’s internal controls The External Auditors had subsequently confirmed were presented to the Board for approval at each system and practices for identification and that they were not aware of any non-compliance At each of the AC meeting, the CFO presented the subsequent Board meetings for release to Bursa management of risks established by the Management. of laws and regulations, as well as any material financial reports and confirmed to the AC, the Securities. The AC was reasonably assured that the same were litigations and claims against the Group other than following matters: operating adequately and effectively. those brought forward from prior financial years.
The External Auditors also tabled the financial reporting standards which had been issued and would be applied to the Group in future financial years.
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AUDIT COMMITTEE REPORT (cont’d)
SUMMARY OF ACTIVITIES (cont’d) (b) The AC had private sessions with the External Auditors 4. Evaluating Internal Audit Process (d) At the meeting held on 20 March 2018, the Internal to discuss any issues as well as reservations arising (a) The AC approved IAD’s 2018 Audit Plan at the meeting Audit Function Evaluation Report was tabled for the 3. Evaluating External Audit Process (cont’d) from their audit without the presence of management held on 26 February 2018. The 2018 Audit Plan was AC to assess the performance of IAD. The AC assessed • The AC on 20 March 2018, discussed with the staff and the executive board members on 26 developed using a risk based audit methodology the effectiveness of the internal audit function External Auditors, the final draft of the Audited February 2018 and 20 March 2018. No major concerns where business units and processes were selected in terms of scope and compliance with relevant Financial Statements for the financial year ended were highlighted and the External Auditors had also for audit based on risk assessments carried out regulatory standards as well as their collaboration 31 December 2017. confirmed that they had received full cooperation periodically by IAD. The AC reviewed the adequacy with the External Auditors. The Committee also from the Management and had unrestricted access to and relevance of the scope and resources allocated assessed the adequacy of resources and core skills and The External Auditors was of the opinion that the all the Company’s records. for the plan and subsequently approved the plan and competencies of staff within the IAD. Company’s Annual Financial Statements gave a its proposed audit timetable and the budgeted man- true and fair view of the financial position, financial (c) The AC had, at its meeting held on 20 March 2018, hours. The AC was satisfied with the performance of IAD in performance and cash flows of the Group and of the reviewed the audit and non-audit fees for the financial 2017 and was of the opinion that the internal audit Company for the financial year ended 31 December year ended 31 December 2017. The 2018 Audit Plan was also reviewed on a quarterly function was appropriate to its size and the nature 2017 in accordance with the Malaysian Financial basis taking into account any developments which and scope of its activities. Reporting Standards, International Financial The AC having considered the nature, scope and had an impact on the audit coverage. Reporting Standards and the requirements of the amount of non-audit fees, was satisfied that there At the same meeting, the Head of IAD confirmed to Companies Act 2016. was no conflict of interest and it would not impair the IAD’s audit engagements for 2018 were mainly carried the AC that all the internal auditors had signed a independence of the present External Auditors. out in the following key business components:- declaration that they were and had been independent, Based on its annual audit, the External Auditors objective and in compliance with the Code of reported the following key audit matters and (d) The AC undertook an annual assessment on the quality • On-going building projects: Conduct and Business Ethics of the Company and the its audit response in its auditors’ report for the of audit of the External Auditors. The External Auditors - Light Rail Transit 3 project; professional standards laid down by the Institute financial year 2017: were assessed based on the following criteria: - MRT Package V201; of Internal Auditors in carrying out their duties as - Parcel F, Putrajaya project; internal auditors. - Revenue and profit recognition for construction • Audit performance; - RCI, South Quay; contracts • Quality of communication; - Kelana Jaya Plot 1; and (e) At the meeting held on 19 November 2018, the AC • Independence; - Projects at southern region. has met with the Internal Audit Department without The revenue and profit recognition on construction • Objectivity; • Major subsidiaries, i.e. Sunway Geotechnics (M) the presence of the management staff to facilitate contracts involve significant judgements in • Professionalism; and Sdn. Bhd. and Sunway Precast Industries Sdn. Bhd.; discussions on additional matters in relation to audit estimating the stage of completion and assessing • Adequacy of resources. • Corporate governance compliance within the Group; issues and internal control weaknesses noted in the the estimated total costs to complete. • Occupational health and safety review; and course of their audit. The External Auditors had provided to the AC, their • Heavy equipment and machineries review. In estimating the total costs to complete, the firm’s policies and written confirmation on their 5. Reviewing Related Party Transaction & Conflict of Group considers the completeness and accuracy independence. (b) The AC reviewed the results of audit engagements Interest Situations of its cost estimation, including its obligations to carried out by IAD at the quarterly meeting of the (a) The AC had at its meetings held on 26 February 2018, contract variations, claims and cost contingencies. The results of the evaluation were tabled to the AC AC and discussed the major findings and audit 17 May 2018, 16 August 2018 and 19 November The total costs to complete including subcontractor at its meeting held on 20 March 2018. Based on the recommendations. The AC also reviewed the status 2018, deliberated on any potential Management’s costs, varies with market conditions and may also results of the performance assessment, the AC and of implementation of corrective actions taken by conflict of interest, related party transactions and be inaccurately forecasted due to unforeseen Management was satisfied with the External Auditors’ Management to ensure appropriate remedial actions recurring related party transactions. events during construction. independence, performance and their audit quality for were taken on a timely basis to address all areas the financial year ended 31 December 2017. of risk and internal control issues. In addition, IAD All related party transactions and recurring related - Assessment of liquidated and ascertained updated the AC on the progress of the 2018 Audit party transactions were found to have complied with damages (“LAD”) on construction contracts As such, the AC had subsequently recommended to Plan and results of ad-hoc assignments including the following criteria:- the Board that the External Auditors be re-appointed audit investigations. Based on the assessment of LAD on construction for the next financial year subject to the shareholders’ i) Carried out in compliance with the MMLR of Bursa contracts, the Group was of the opinion that no approval at the 4th Annual General Meeting of the (c) At the meeting held on 26 February 2018, the AC Securities and relevant rules and regulations; LAD recognition required. Company. reviewed the Internal Audit Charter. There were no ii) Transactions/arrangements were carried out on an material changes to the Internal Audit Charter since it arms’ length basis and under normal commercial • On 19 November 2018, the AC reviewed and was first adopted by the AC in 2015. terms; discussed with the External Auditors and iii) Transactions/arrangements were in the best Management, the Audit Planning for financial interest of the Company; year ended 31 December 2018 which outlined iv) Interested parties abstained from deliberation and the External Auditors’ engagement and reporting voting; responsibilities, audit approach, materiality and v) Adequate disclosure via Bursa Announcements, performance materiality, areas of significant audit Quarterly Reports and Annual Report; and attention, engagement team as well as audit vi) Prior approval by the shareholders, where reporting and deliverables. applicable.
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AUDIT COMMITTEE REPORT (cont’d)
SUMMARY OF ACTIVITIES (cont’d) (d) The AC was satisfied that there were no breaches IAD is headed by Ms Celia Lee Kat Li who is a Chartered (b) Performed audit engagements which covered reviews of of the MMLR of Bursa Securities as reported by the Member of the Institute of Internal Auditors Malaysia (CMIIA). internal control systems, accounting and management 5. Reviewing Related Party Transaction & Conflict of Company Secretary at the quarterly meetings during IAD has 5 auditors and most of the IAD staff have professional information systems, risk management and governance Interest Situations (cont’d) the financial year. qualifications and are members of the Malaysian Institute of practices. With the assistance of the IAD, the AC had satisfied Accountants (MIA). The Head of IAD and the audit executives itself the adequacy, appropriateness and compliance (e) Minutes of the previous AC’s meetings were tabled at have confirmed that they are free from any relationships or (c) Issued internal audit reports to the AC and Management of the procedures established to monitor recurrent the subsequent Board meetings by the AC Chairman. conflicts of interest which could impair their objectivity and highlighting results of the assessments of internal related party transactions. Significant issues and concerns discussed during the independence in their audit assignments. controls identifying key areas of concerns as well as AC meetings together with the recommendations providing recommendations for improvements and The AC took note that there was no management were highlighted and reported to the Board. IAD is a member of the Malaysian Chapter of the Institute of follow-up audits. conflict of interest situations for operational matters Internal Auditors (IIA) and adopts the IIA Standards laid down (including any transaction, procedure or course of in the International Professional Practices Framework issued (d) Acted on suggestions made by the AC and/or senior conduct) as reported by the MD at the quarterly PERFORMANCE EVALUATION by the IIA. IAD successfully completed its external Quality management on concerns over operations or controls and meetings. The assessment on the performance and effectiveness of the Assessment Review in 2015 and continues to meet or exceed significant issues pertinent to the Company and of the AC are undertaken by the Board annually. The AC Members also the IIA Standards in all key aspects. IAD carried out its activities Group. (b) On 26 February 2018, the AC reviewed and approved undertook a Self and Peer Evaluation to assess whether the AC based on a risk-based annual audit plan approved by the AC. the Circular to Shareholders in respect of the proposed members had carried out their duties and responsibilities in To ensure that the responsibilities of IAD are fully discharged, (e) Performed investigative audits on allegations of renewal of shareholders’ mandate for recurrent accordance with its terms of reference. the AC reviews annually the adequacy of the scope, function mismanagement or improper acts reported through the related party transactions as well as the statements and resources of the IA. whistleblowing procedures and other channels. by the AC in respect of the proposed shareholders’ Based on the assessment, the Board was satisfied that the AC mandate for recurrent related party transactions. was effective in discharging its duties and responsibilities as The internal audit reports arising from assignments were (f) Reported to the AC on review of the adequacy, required under the terms of reference of the AC. issued to the Management for their response, corrective appropriateness and compliance with the procedures 6. Other Matters actions and update on status of implementation of established to monitor recurrent related party (a) On 26 February 2018 and 20 March 2018, the AC was audit recommendations. The internal audit reports were transactions. briefed by the Company Secretary of the following CONTINUING EDUCATION subsequently tabled to the AC for their deliberation and approval. The Head of the IAD has unrestricted access to the (g) Performed independent evaluation on the operation of pronouncements: The details of training programmes and seminars attended AC and reports directly to the AC. risk management framework focusing primarily on the by each AC Member during the financial year ended 31 adequacy and effectiveness of the said framework. i) Issuer Communication No. 3/2017 issued by Bursa December 2018 are set out in the Corporate Governance During the financial year ended 31 December 2018 and as Securities in relation to the Guidance on Disclosure Overview Statement under “Training Programmes, Seminars at the date of this report, the IAD carried out the following The costs incurred for the internal audit function in respect of relating to Material Contracts and Prevention of and Workshops attended by Directors”. Selective Disclosure on Material Information; activities:- the financial year ended 31 December 2018 including staff ii) Amendments to the MMLR arising from the payroll costs and overheads amounted to RM1.02 million. The Companies Act 2016; (a) Prepared and presented the risk-based annual internal cost incurred in the previous year was RM963,000. iii) Enforcement of the Corporate Rescue Mechanism OTHERS audit plan encompassing key business segments within The AC and the Head of IAD have been given the responsibility under Division 8, Part III of the Companies Act the Group for the approval of the AC. by the Board to monitor the implementation of the 2016; and Whistleblowing Policy and Procedures, whilst duties relating iv) Corporate liability provision under the MACCA to the day-to-day administration of the policy are performed 2018. by the Head of IAD. During the financial year under review, there were no cases reported through the channel. (b) On 20 March 2018, the AC reviewed and recommended for the Board’s approval, the Corporate Governance Statement, AC Report and Statement on Risk Management and Internal Control for inclusion into INTERNAL AUDIT FUNCTION AND SUMMARY OF the Annual Report 2017 of the Company. ACTIVITIES The Internal Audit (“IA”) function is an integral part of The AC also had reviewed and recommended for the the assurance framework and it is performed in-house and Board’s approval, the Annual Report 2017 of the undertaken by IAD. The mission of IAD is to enhance and Company. protect the Company and its Group’s organisational value by providing risk-based and objective assurance, advice (c) On 16 August 2018, the AC reviewed and approved its and insight. IAD helps the Group accomplish its objectives revised terms of reference to reflect the current best by bringing a systematic, disciplined approach to evaluate practice in the composition of the AC and arising from and improve the effectiveness of risk management, internal the amendments to the MMLR. control and governance processes. IAD reports functionally to the AC and administratively to the Managing Director.
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STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
The Board of Directors (“the Board”) is pleased to present INTERNAL CONTROL SYSTEM 3. Employee Engagement and Performance 5. Risk Management the Statement on Risk Management and Internal Control, Planning, monitoring and review of the Group’s performance Key performance indicators, based on balanced scorecards The Group’s risk management framework is benchmarked pursuant to Chapter 15, Paragraph 15.26(b) of the Main and conduct are done via scheduled periodic meetings of are used to track and measure employee’s performance against the ISO31000:2009 Risk Management – Principles Market Listing Requirements of Bursa Malaysia Securities the Board, Board Committees and management. The annual while employee engagement surveys are conducted to and Guidelines and is designed to embed Enterprise Risk Berhad and Principle B of the Malaysian Code on Corporate Business Plan ensures that all operating subsidiaries prepare gain feedback on effectiveness and efficiency of the Group Management (“ERM”) into key activities, initiatives and Governance 2017, with guidance from the Statement on Risk and present its outlook, expectations, budgets, performance to aid continuous improvement of employee competency, processes of the Group. This enables the Group to identify, Management and Internal Control: Guidelines for Directors of and targets for the forthcoming year. in line with the Group’s goals and objectives. assess and mitigate risks that may prevent the Group from Listed Issuers. achieving its objectives. In doing so, the stakeholders are The Risk Working Committee (“RWC”) led by Mr Richard Wong, 4. Employee Conduct assured that their interest is protected. During the financial who is also the Senior Executive Director for Building Central Available for staff access in the Group Governance and year, the Group constantly reinforces its risk management THE BOARD’S RESPONSIBILITY was setup to ensure that the Group’s risk coverage is more Integrity portal, this is governed by a series of policies framework to remain relevant and effective given the The Board affirms its commitment and responsibility towards conclusive on exposures specifically to operational matters. which define the core values of the Group – Integrity, present business environment. effective risk management and internal control so as to Humility and Excellence. safeguard shareholders’ interests and Group’s assets. In doing The RWC communicates the Board’s expectations to The framework is enterprise-wide and outlines policies and so, the Board embeds risk management in all aspects of the management teams and employees during management a) The Whistle Blowing Policy serves as a guideline practices for effective risk mitigation. It allows the Group activities, initiatives and processes of Sunway Construction meetings, managers’ conferences and forums while the heads for stakeholders and staff to report in a safe and to: Group Berhad (“SunCon”) and its subsidiaries (“the Group”). of the operating subsidiaries and departments are empowered confidential manner, any concerns regarding possible The framework has been set in place by the Board to identify, with the responsibility of planning, monitoring, reporting and illegal, unethical conduct or malpractice to the • Establish clear functional responsibilities and evaluate, mitigate and monitor the key risks faced by the managing their respective operations. management for action. Whistle blowing avenues accountabilities within committee structures for Group. include a direct line, e-mail or written mail to the Head management of risks; Components of the Internal Control System of Internal Audit Department and Chairman of the AC. • Enhance and improve corporate governance with a clear, The Board recognises that the framework is designed to concise and robust structure for the Group; mitigate rather than eliminate the risks or events with 1. Policies & Procedures b) The Fraud Response Procedures guides management • Determine risk appetite and risk tolerance based on significant adverse impact on the achievement of the Group’s The Group’s internal control system encompasses teams of respective business units to respond measurable parameters related to critical risks that may objectives and strategies. As such, it provides reasonable formalised and documented internal policies, standards to allegations or suspicions of fraud and ensure impact the strategy, performance and reputation of the but not absolute assurance against material financial and procedures to ensure compliance with internal that all cases of suspected or alleged frauds are Group; misstatement and management information and records, or controls, relevant laws and regulations. It enables all reported promptly, and investigations are conducted • Set risk policies and limits consistent with the risk against financial losses or fraud. divisions and operating subsidiaries to effectively and effectively. appetite and tolerance of the Group; efficiently, operate and respond proactively to potential • Ensure appropriate skills and resources are applied to risk In pursuit of improving and integrating effective governance business, operational, financial, compliance and other c) The Integrity Pact serves to ensure transparency and management. structures and processes into the framework, the Board risks in achieving the Group’s goals and objectives. These fairness in the procurement process of the Group with has set up a Risk Management Committee (“RMC”) which documents are regularly reviewed to ensure relevance and an aim to promote efficiency in procuring products or Continuous risk assessment is fundamental to the Group’s comprises of Independent Directors in majority including applicability and are published in the Group’s intranet for services in accordance with approved specifications risk management process. Operating subsidiaries are its Chairman to oversee the Group’s risk management and employees’ reference. and prices while avoiding distortionary factors and tasked with reporting major risks on a quarterly basis to internal control system. The RMC is accountable to the Board corrupt practices. management as it aims for a holistic approach towards risk and meets quarterly to: 2. Audits management. The respective operating subsidiaries being The Group Internal Audit Department (“GIAD”) carries d) The Group’s Code of Conduct and Business Ethics risk owners of their immediate sphere are responsible to • Identify, assess and monitor key business risks and review out internal audits on divisions and business units of the provides an ethical framework to guide actions and develop the appropriate response strategies to mitigate risk mitigation strategies; Group based on a risk-based audit plan approved annually behaviors of directors and employees of the Group. the risks. • Review and recommend risk management strategies, by the Audit Committee (“AC”). Based on these audits, It reflects the increasing need for effective corporate policies and levels of risk tolerance; GIAD provides the AC with periodic reports highlighting governance and compliance measures in the Group’s In providing assurance to the RMC and the Board, RWC • Ensure infrastructure, resources and systems are in place observations, recommendations and action plans to businesses, domestically and internationally. continues to review the quarterly risk templates in to manage risks. improve the Group’s internal control system. The AC identifying and mitigating all major risks of the operating reviews and deliberates on any matters relating to internal e) The Staff Handbook provides information on subsidiaries under the Group. The quarterly risks from all During the financial year, the RMC has reviewed, appraised control highlighted by the External Auditors in the course employment terms and conditions in addition to operating subsidiaries are consolidated and updated to and assessed the controls and progress of action plans taken of their statutory audit of the financial statements of the compensation, leaves, health benefits, education the Chairman, Managing Director and RMC, highlighting to mitigate and manage the Group’s risk exposure. The RMC Group. assistance, discounts, expectations and career path to major risks and mitigating controls carried out. has subsequently provided assurance to the Board that the name a few. Also included in the policy is the Group’s Group’s risk management and internal control are operating Additionally, subsidiaries accredited with certifications Personal Data Protection Notice on the collection and The Group has four (4) core response strategies for risk adequately and effectively in all material aspects. This such as International Organisation for Standardisation handling of personal information in accordance with management. These include: statement however, does not cover associate companies and (“ISO”) and Occupational Health and Safety Advisory the Malaysian Personal Data Protection Act 2010. joint ventures where risk management and internal control Services (“OHSAS”) are audited as scheduled by auditors are managed by the respective management teams. of relevant certification bodies. Results of these audits are reported to management.
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STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (cont’d)
INTERNAL CONTROL SYSTEM (cont’d) Risk management discipline ensures that risk assessment Apart from the above, RWC participates in other value-adding Mitigation: is an on-going process whereby risks and risk mitigation exercises such as: The Group has successfully negated such risks for the 5. Risk Management (cont’d) measures are regularly reviewed and adjusted accordingly. financial period with effective and efficient procurement of The continuous risk assessment process therefore, 1. Review SunCon’s existing Standard Operating Principles necessary resources to mitigate any potential delays and a) Risk Termination represents the cornerstone of an effective ERM program (“SSOP”). claims including active negotiation with client to accelerate In this instance, management chooses to terminate for the Group. works due to unforeseen delays, deploying more resources risks by eliminating the business or by significantly The review of the Group’s SSOPs is conducted by key and improving supervision for the purpose of increasing altering it. The Group may choose this route for risks Reporting Structure relevant personnel from respective divisions or operating productivity. that could have major or catastrophic impact on its subsidiaries, covering credit control, procurement, products businesses. The RMC will meet and deliberate on the top risks identified and services and operative guidelines. 2. Cost overrun on a quarterly basis while its Chairman will subsequently b) Risk Reduction update the Board on proceedings and updates from the 2. Assist in day-to-day operations for operating subsidiaries. This risk concerns the Group as the fluctuations for raw Risks may be reduced by taking specific actions RMC. Significant issues arising from changes in business material prices especially steel bar prices and preliminary aimed at reducing the likelihood of occurrence, thus environment are reviewed continuously to ensure minimal Upon instruction from management, key relevant cost due to prolongation of project. It could result in reducing the impact of these risks on the Group’s impact to the Group. The Group positions its business units personnel assists in fulfilling daily operative requirements overrun of project operation costs from the tender costs. businesses. towards a profitable objective while incorporating risk to ensure minimal business interruption or delays that management principles into our functions and processes. could hamper the achievement of goals and objectives. Mitigation: c) Risk Acceptance In response to this, some contracts have pass through Management may choose not to act and to consciously RWC is accountable for effectiveness of the risk 3. Assist in conducting regulatory research. clauses in relation to steel price fluctuation. Where there accept certain risks which are significantly low in management framework and is independently are no pass through clauses, the Group negotiates with likelihood of occurrence and/or impact. Factors to distinguished from risk owners - the respective heads of Such research is conducted to ensure that the Group’s suppliers to hedge our steel bar purchases for 6 months consider for risks of such nature would be: operating subsidiaries being such person with vital insight projects and businesses (existing or new) remain compliant interval. To control our preliminary cost like overhead • Adequacy of current controls; of respective businesses and able to actively influence the to laws and regulations. and plant and machinery, we monitor the progress of our • Quality and quantity of information on the controls; identified risks through decisions and actions. project actively to ensure timely delivery. • Likelihood and consequences of the risk occurring; 4. Assist in conducting tender for divisions and operating and Consequently, RWC undertakes the role of assisting subsidiaries. 3. Cyber & IT Risk • The cost of additional controls Business Units by identifying, quantifying, managing and mitigating critical risks in addition to monitoring and RWC participates in tender processes to form an With the advent of cyber threats and other potential d) Risk Transfer reporting of action plans prepared by the Business Units. independent party to ensure fairness in observance of due hazards such as fire, floods and other major equipment Management may choose to transfer all or part of a process, decision making and tender awards. failures, among others, the continuity of business certain risk to other parties via: RWC continues to support the Group’s efforts in embracing operations is of a major concern to the Group. This risk, if • Transferring an entire business process to another change and evolution into a resilient conglomerate, Key Risk Factors left unattended, could result in major disruption of critical party as is the case with sub-contracting and allowing it to refine its focus and strategies to achieve business processes and possible unauthorised disclosure outsourcing arrangements; goals and objectives while sustaining an ecological balance For the financial year under review, RWC has identified the of sensitive business information, resulting in financial or • Sharing the business process with another party between employees, communities and the environment. following risks for the Group. These were presented to the reputational loss. as is the case with partnerships and joint venture Thus, as the Group commits to provide Environmental, Board where controls, mitigating plans and monitoring arrangements; and Safety & Health (“ESH”) standards and practices to enhance mechanisms were highlighted. Mitigation: • Retaining the process and transferring the legal stakeholders’ value, RWC’s quarterly risk reporting exercise To mitigate this risk, the Group has outsourced the IT and financial risks as is the case with insurance with operating subsidiaries goes beyond risk mitigation 1. Project Completion services to ITSSC since 2004 in which various policies, arrangements and the use of certain treasury/ to ensure that operational processes are consistent and resources, processes, and systems have been developed financial products. remain compliant with the relevant standards such as As the Group strives to maintain its position as Malaysia’s and deployed. The Group-wide Information Security policy, OHSAS 18001 and ISO 14001 to name a few. largest listed pure play construction group by revenue, called the Sunway Information Security Policies (“SISP”), this risk is perennial and holds a significant weight in risk was developed in accordance with ISO/IEC 27002 (2005) Likelihood Rating analysis. standards. ITSSC is also certified in Disaster Recovery Al ost ery (“DR”) through ISO27001:2013 Information Security Certain Si ni icant Management System (“ISMS”) standard in order to minimise the risk of business financial lost, business i ely i interruptions and unavailability of IT service through ossi le timely backup of data, migration to Cloud and having o erate off-site storage for backup tapes. In addition, continuous nli ely initiatives are in place to enhance the cyber defense ow capabilities and IT resiliency of the Group. Rare
nsi ni icant inor o erate a or ery Si ni icant Impact Rating Ris ap SunCon onitors its ris ia t e a o e ris assess ent 188 189 Sunway Construction Annual Report 2018 Sunway Construction Annual Report 2018
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (cont’d) ADDITIONAL COMPLIANCE INFORMATION
INTERNAL CONTROL SYSTEM (cont’d) THE BOARD’S CONCLUSION The information set out below is disclosed in compliance with into by the Company and/or its subsidiaries involving The Board is pleased to report that the state of the Group’s risk the Main Market Listing Requirements of Bursa Malaysia directors’ and major shareholders’ interests during the Key Risk Factors (cont’d) management and internal control framework is able to meet Securities Berhad (“Bursa Securities”):- financial year ended 31 December 2018. the Group’s objective to ensure good corporate governance. 4. Human Capital There was no potential or present failure or weakness that 1. STATUS OF UTILISATION OF PROCEEDS RAISED FROM 3. RECURRENT RELATED PARTY TRANSACTIONS OF would have material adverse effect on the results of the Group CORPORATE PROPOSAL REVENUE OR TRADING NATURE Risks arising from issues such as high staff turnover, loss for the year under review. There were no corporate proposals during the financial The details of the recurrent related party transactions are of key and technical staff, competition from other industry year. Therefore, there were no proceeds raised from disclosed in Note 38 to the Financial Statements. players, succession planning and staff retention. The Board has also received assurance from the MD and corporate proposals during the financial year. CFO that the Group’s risk management and internal control Mitigation: framework is operating adequately and effectively in all 2. MATERIAL CONTRACTS INVOLVING DIRECTORS’ AND Human Resources Department, together with respective material aspects. Continuous focus on measures to protect MAJOR SHAREHOLDERS’ INTERESTS divisions and operating subsidiaries continuously improve and enhance shareholders value and business sustainability There were no material contracts (not being contracts and enhance mitigation plans which include employee will remain a core practice for the Group. entered into in the ordinary course of business) entered engagement surveys, team building exercises, training and development – internal and external and constant reviews of the Group’s remuneration and compensation benefits REVIEW OF THE STATEMENT BY EXTERNAL for staff. AUDITORS The External Auditors have reviewed this Statement on Risk 5. Workplace Safety and Health Management and Internal Control as required under Paragraph 15.23 of Bursa Malaysia Securities Berhad’s Main Market Risks arising from the intrinsic nature of construction Listing Requirements. The limited assurance review was activities, which often involved complex activities being performed in accordance with Malaysian Approved Standard carried out by teams of workers, we remain exposed to on Assurance Engagements, ISAE 3000 (Revised) Assurance occurrence of accidents and incidents caused by human Engagements Other than Audits or Reviews of Historical error or other factors. In addition, all construction activities Financial Information and Audit and Assurance Practice Guide generate dust, waste and noise pollution. 3, Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control Included Mitigation: in the Annual Report. Appropriate and effective policies and procedures are implemented and thoroughly monitored jointly by Based on their procedures performed, the External Auditors Environmental, Safety and Health Department and RWC have reported to the Board that nothing has come to their to mitigate these risks. There is also strict compliance to attention which causes them to believe that this Statement is various environmental laws and regulations. not prepared, in all material respects, in accordance with the disclosures required by paragraph 41 and 42 of the Statement 6. Dependence on the Property Market and Government on Risk Management and Internal Control: Guidelines for Infrastructure Spending Directors of Listed Issuers, nor is factually inaccurate.
Risks relating to decline in demand in the property sector This Statement on Risk Management and Internal Control was and government infrastructure spending under the approved by the Board of Directors on 20 March 2019. construction sector. In Singapore, the manufacturing and sale of precast concrete products business segment is also dependent on the number and timing of launches by the Housing Development Board (“HDB”).
Mitigation: In response to this, the Group continuously improve our productivity and technical capabilities to enable us to take on more complex construction projects especially in the areas of mechanical, electrical and plumbing services, foundation and earthwork and industrialised building system (“IBS”). As part our expansion plans, the Group has begun exploratory works on Renewable Energy in effort to escalate our technical expertise in this field. In addition, the Group will also target to undertake projects within the Treasure Crest, Singapore, supply of prefabricated bathroom units (PBU) by Sunway Concrete Products (S) Pte. Ltd. ASEAN region.
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INVESTOR RELATIONS (“IR”) FINANCIAL ANNOUNCEMENT Suncon continues to engage with its stakeholders through a series investor relations activity throughout the year. All major SunCon places great emphasis on timely and effective share price has been very volatile and fallen towards the end announcements such as the release of the quarterly results, new construction orders or new ventures are published on Bursa communication related to the Company’s financial of the year as depicted on the Review of Share Performance Malaysia. The information will then be disseminated in the form of flashnotes to all interested parties. We also ensure that these performance, business strategies and future prospects as section. documents are immediately made available on the Group’s Investor Relations website. these are essential in maintaining good relationship with our stakeholders. Our approach to investor relations (IR) premised IR ACTIVITIES SunCon Group held its 4th Annual General Meeting on the 20 June 2018 at Sunway Resort Hotel and Spa where our Managing on the philosophy that all investors and research analysts SunCon participated in 10 investor conference events as Director presented the financial performance and review for 2017. The Board of Directors and management also duly responded should have equal access to information in a transparent and compared to 7 events in 2017 as depicted below. Interest all the queries, opinions and feedback from the shareholders. The SunCon’s Board of Director and management team have also non-discriminative environment. in our counter post GE14 still remained encouraging. We shared the company’s most recent updates and future prospects. continued to have one to one sessions with our analyst and SunCon’s IR team has been actively promoting fair valuation also fund managers as and when requested. We believe that it for SunCon and attracting new investors who believe in our is more productive to have one on one session as it tends to be During the year, we have a total of 55 reports from various research houses and we have tabulated the analysis of the operational model and business strategies. Fundamentally, more personalised. During the year, we have hosted 25 small recommendations as per below. SunCon remains the same despite the negative market group meetings with analyst and investors. sentiment post Malaysia’s 14th General Election (GE14). Our Report Institution Share Price at Target Recommen- Report Institution Share Price at Target Recommen- Date report date Price dation Date report date Price dation 16-01-18 Maybank IB 2.62 2.63 Hold 17-08-18 Affin Hwang 2.02 2.45 Buy Organiser Event Date Venue 17-01-18 Alliance DBS 2.46 2.60 Hold 17-08-18 Hong Leong IB 2.02 2.25 Buy 1. Alliance DBS Pulse of Asia Conference 11 Jan 2018 Singapore 27-02-18 Affin Hwang 2.46 2.45 Hold 17-08-18 UOB KayHian 2.02 2.17 Hold 2. Alliance Investment Bank Corporate Day 16 Jan 2018 Malaysia 27-02-18 Macquarie Research 2.46 2.80 Outperform 17-08-18 Alliance DBS 2.02 2.04 Hold 3. Maybank IB & Bursa Malaysia Invest Malaysia 23-24 Jan 2018 Malaysia 27-02-18 Maybank IB 2.46 2.63 Hold 17-08-18 Macquarie Research 2.02 2.00 Neutral 4. CLSA Asean Forum 7 – 9 Mar 2018 Bangkok 27-02-18 RHB Investment Bank 2.46 2.70 Buy 17-08-18 Maybank IB 2.02 2.30 Hold 5. Maybank Kim Eng Invest ASEAN 27-28 March 2018 Singapore 27-02-18 Kenanga 2.46 2.30 Perform 17-08-18 CLSA Securities 2.02 1.60 Sell 6. Affin Hwang Corporate Event 23 April 2018 Malaysia 27-02-18 TA Securities 2.46 2.65 Hold 27-08-18 Macquarie Research 1.90 2.00 Neutral 7. Nomura Investment Forum Asia 2018 6-8 June 2018 Singapore 03-04-18 RHB Investment Bank 2.06 2.50 Buy 07-09-18 RHB Investment Bank 1.81 2.30 Neutral 8. Nomura Invest Malaysia Tokyo 24-25 July 2018 Tokyo 09-04-18 Alliance DBS 2.02 2.60 Buy 18-09-18 AmInvestment Bank 1.79 1.53 Underweight 9. Citibank ASEAN C-Suite Investor Corporate Day 2018 26 July 2018 Malaysia 19-04-18 Macquarie Research 2.18 2.60 Outperform 03-10-18 Affin Hwang 1.81 2.45 Buy 10 Macquarie ASEAN Conference 2018 27 August 2018 Singapore 03-05-18 Affin Hwang 2.22 2.45 Buy 18-10-18 Hong Leong IB 1.48 1.86 Buy 14-05-18 Alliance DBS 2.18 2.60 Hold 02-11-18 RHB Investment Bank 1.49 2.00 Buy SunCon is also very honoured to be invited for exclusive interviews with local printing house. During the year, SunCon has 15-05-18 RHB Investment Bank 2.16 2.50 Buy 14-11-18 Kenanga 1.57 1.65 Perform been interviewed by The Edge Malaysia and Focus Malaysia and these interviews have been published by the printing houses 15-05-18 TA Securities 2.16 2.29 Hold 14-11-18 AmInvestment Bank 1.57 1.27 Underweight respectively. 17-05-18 RHB Investment Bank 2.15 2.42 Buy 21-11-18 Alliance DBS 1.60 1.66 Hold RESEARCH COVERAGE 18-05-18 Kenanga 2.15 2.40 Outperform 21-11-18 Affin Hwang 1.61 2.00 Buy The number of research coverage has remained at 14 research institutions from 2017 to 2018. The research institutions include: 18-05-18 Maybank IB 2.15 2.30 Hold 21-11-18 CLSA Securities 1.61 1.53 Sell 1. Affin Hwang Investment Bank 8. UOB KayHian 18-05-18 CLSA Securities 2.15 2.55 Buy 21-11-18 Hong Leong IB 1.61 1.86 Buy 2. AllianceDBS Group Research 9. Macquarie Research 18-05-18 Macquarie Research 2.15 2.60 Outperform 21-11-18 Kenanga 1.61 1.30 Underperform 3. AmInvestment Bank 10. Maybank Kim Eng 4. BIMB Securities Research 11. MIDF Research 13-07-18 RHB Investment Bank 1.80 2.42 Buy 21-11-18 Maybank IB 1.61 1.70 Hold 5. CLSA Securities 12. Nomura Securities 18-07-18 Hong Leong IB 1.85 2.37 Buy 21-11-18 Nomura 1.61 2.00 Buy 6. Hong Leong Investment Bank 13. RHB Research Institute 19-07-18 Macquarie Research 1.95 2.00 Neutral 21-11-18 RHB Investment Bank 1.61 2.12 Buy 7. Kenanga Research 14. TA Securities 31-07-18 Kenanga 1.91 1.95 Perform 21-11-18 TA Securities 1.61 1.32 Sell 09-08-18 AmInvestment Bank 1.98 2.00 Hold 21-11-18 UOB KayHian 1.61 1.54 Hold AWARDS AND RECOGNITION 17-08-18 RHB Investment Bank 2.02 2.30 Buy 21-11-18 AmInvestment Bank 1.61 1.27 Underweight In 2018, SunCon’s IR team effort were recognised in the 8th Malaysia Investor Relations Association (“MIRA”) Awards where the team was shortlisted in a total of 5 categories which including Best Company for Investor Relations (Mid Cap), Quality of One-on- 17-08-18 TA Securities 2.02 1.99 Sell 12-12-18 Affin Hwang 1.46 2.00 Buy One Meeting (Mid Cap), Best Chief Financial Officer for Investor Relations (Mid Cap), Business Knowledge & Insights of Investor 17-08-18 Kenanga 2.02 1.80 Underperform Relations Team (Mid Cap) and Quality of Annual Reports / Formal Disclosure.
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